A business's money. Includes banks balances, bills, coins, and checks.

A customer's promise to pay in the future for services or goods sold. Often described as "On Account".

Written promises to pay money and interest by a certain date. Example: performing services and having to pay before a certain time period.

Land, building, equipment, furniture, and fixtures

A promise made by the business to pay a debt in the future

A written promise made by the business to pay a debt, usually involving interest, in the future.

An amount owed but not paid. A specific type of payable such as Taxes payable, Rent Payable, and salaries payable

Occurs when a company receives cash from a customer but has not provided the product or services. The promise to provide the product or services.

Reps the net contribution of the stockholders in the businesses, increases equity.

Distribution of cash or other assets to the stockholders. Decreases equity.

Earning that results from delivering goods or services to customers.

The cost of selling goods or services. Decreases equity. Rent expense, salaries expense, and utilities expense

Is used to organize a company's account.

A record holding all the accounts of the business, the changes in those accounts, and their balances

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Chapter 2

Question	Answer
What is the accounting equation?	Assets=Liabilities+Equity
What is cash?	A business's money. Includes banks balances, bills, coins, and checks.
Accounts Receivable	A customer's promise to pay in the future for services or goods sold. Often described as "On Account".
Notes Receivable	Written promises to pay money and interest by a certain date. Example: performing services and having to pay before a certain time period.
Prepaid Expense	Expenses paid in advanced
What are some assets	Land, building, equipment, furniture, and fixtures
Accounts payable	A promise made by the business to pay a debt in the future
Notes Payable	A written promise made by the business to pay a debt, usually involving interest, in the future.
Accrued Liability	An amount owed but not paid. A specific type of payable such as Taxes payable, Rent Payable, and salaries payable
Unearned Revenue	Occurs when a company receives cash from a customer but has not provided the product or services. The promise to provide the product or services.
Common stock	Reps the net contribution of the stockholders in the businesses, increases equity.
Dividends	Distribution of cash or other assets to the stockholders. Decreases equity.
Revenues	Earning that results from delivering goods or services to customers.
Expenses	The cost of selling goods or services. Decreases equity. Rent expense, salaries expense, and utilities expense
Chart of Accounts	Is used to organize a company's account.
Ledger	A record holding all the accounts of the business, the changes in those accounts, and their balances
What kind of system does accounting use to record the dual effects of transaction?	Double entry system

Created by: user-1988123

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