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15 Cards in this Set
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the financial statement showing the financial position of an enterprise by summarizing its assets, liabilities, and owner's equity at a point in time. Also called the statement of financial posistion
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balance sheet
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Economic resources owned by an entity
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assets
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The widely used principle of accounting for assets at their original cost to the current owner.
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cost principle
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Debts or obligations of an entity that resulted from past transactions. They represent the claims of creditors on the enterprise's assets.
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liabilities
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the excess of assets over liabilities. the amount of the owners investment in the business, plus profits from successful operations that have been retained in the business.
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owners equity
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What increases owner's equity?
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investments of cash or other assets by owners and earnings from profitable operation of the business
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what decreases owner's equity?
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payments of cash or transfers of other assets to owners and losses from unprofitable operation of business
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assets are equal to the sum of liabilities plus owner's equity
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accounting equation
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an activity statement that subtracts from the enterprise's revenue those expenses required to generate the revenues, resulting in a net income or a net loss.
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income statement
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An activity statement that explains the enterprise's change in cash in terms of its operating, investing, and financing activities.
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statement of cash flows
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What are some forms of business organization
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sole proprietorships, partnerships, corporations.
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an unincorporated business owned by one person.
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sole proprietorship
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an unincorporated business owned by two or moer persons voluntarily acting as partners (co owners)
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partnership
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a type of business organization that is recognized under the law as an entity separate from its owners.
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corporation
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users of financial statements are informed of any facts necessary for the proper interpretation of teh statements.
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adequate disclosure
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