An increase in equity resulting from the sale of goods or services is called revenue.

A sale for which payment will be received at a later date is called a sale on account.

Unlike a liability, which is an amount that is owed, the cost of goods or services used to operate a business is called an expense.

Assets taken from the business for the owner’s personal use are called withdrawals.

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Ch. 1.3 Vocab

Vocab

Term	Definition
Revenue	An increase in equity resulting from the sale of goods or services is called revenue.
Sale on account	A sale for which payment will be received at a later date is called a sale on account.
Expense	Unlike a liability, which is an amount that is owed, the cost of goods or services used to operate a business is called an expense.
Withdrawals	Assets taken from the business for the owner’s personal use are called withdrawals.