CHAPTER 2 Flashcards
the report in which shows a firm’s assets, liabilities, and owner’s equity as of a specific date is called
balance sheet
owner’s equity
is the amount by which business assets exceed the business liabilities
income statement
reports the profitability of business operations for a specific period of time
accounts payable
is an unwritten promise to pay a supplier for assets purchased or services received
account
is a separate record used to summarize changes in assets, liabilities, and owner’s equity of a business
identifying accounts and classifying accounts is part of which phase in the accounting process
processing
Statements of owners equity
Report the investments and withdrawals by the owner, the profits and Vosses generated through operations, and how they have affected the capital account
Intheaccounting process, the financial statements are
Input
The accounting equation may be expressed as
Owner’S equity = assets - liabilities
withdrawal
is a reduction in owner’s equity as a result of the owner taking cash or other assets out of the business for personal use
the financial statement that shows the state of the firm’s assets, liabilities and owner’s equity on a specific date is called
balance sheet
business transactions
is an economic event that has direct impact on the business
any accounting period of twelve month’s duration is usually referred to as a
fiscal year
assets, liabilities and owner’s equity
is the relationship between the three basic accounting elements and can be expressed in the form of a simple equation known as the accounting equation
revenues
represent the amount a business charges customers for products sold or services performed
