Accounting is done in _____
Accounts
An account is ___
a record keeping device
How many account types are there?
5 of them
What is the first Account Type
Asset
What is the second Account Type
Liabilities
What is the third Account Type
Equity
What is the fourth Account Type
Revenues
What is the fifth Account Type
Expenses
Definition of Assets
Companies resources that are expected to provide benefit for the company
Examples: Cash, Supplies, Property, Franchises
Definition of Liabilities
Debts and Obligations of a company that must be settled in the future
Examples: Accounts Payable, Salaries, Income Tax
Definition of Equity
Net worth of a company after all liabilities have been settled
Examples: Dividends, Common Stock
Definition of Revenues
Amounts generated by a company during normal course of business through goods and services
Examples: Sales, Service Revenue
Definition of Expenses
Amounts incurred by a business in order to generate revenue
Examples: Salaries Expense, Cost of Goods Sold
Current Asset: Cash
provides benefit for future operations
Current Assest: Accounts Receivable
amounts due from customers for the goods sold or services
Current Asset: Merchandise Inventory
most valuable when the inventory is all sold out
Current Asset: Prepaid Expenses
protects and insures company in the future, paying for ads and rent
Current Asset: Suppliers
consumable items used in business, sticky notes, cups
Long Term Assets: Property Plant and Equipment (PPE)
land, equipment, buildsings, furniture, provide a place of business on which to operate
Long Term Assets: Intangible assets
No physical substance, a patent, copyright,
Assets provide a future benefit? (T/F)
True
Current Liabilities: Notes Payable
loan taken out, meant to be repaid in the future, can be long term or current
Current Liabilities: Accounts Payable
amount due to vendors for goods purchased and services enlisted
What is a vendor?
a business from which a company routinely buys goods and services
Current Liabilities: Accrued Liabilities
comprises of all outstanding amounts due to variius individuals and entities for business purposes
Current Liabilities: Unearned Revenue
represents a service that a company is obligated to preform
Long Term Liabilities: Bonds Payable
debt instruments that a company has to repay to a bond investor who buy them
True or False: Liabilities represent an obligation to be settled?
True
Equity equates to
E = Assets - Liabilities
Equity also refers to
Company's net assets or capital
Common Stock is
contirbuted capital or paid in capital by owners and investors
Retained Earnings is known as
earned capital, acquired through business operations.
Distributions of a companies earnings back to its owners and investors is called
Dividends
Revenues
the process where a company records sales
Excess cash for reinvestment are recorded in
INterest Revenue
The expense of buying an item is called
Cost of Goods Sold
"Recievable" means
Asset
"Payable" means
Liablity
"Revenue" means
Revenue, EXCEPT for UNEARNED REVENUE
"Expense " means
Expense
Income statement
reports a company's revenue and expenses.
Balance sheet
records assets liabilities and equity