The financial reports of a business are assumed to include the results of only that business’s activities.
The resources owned by a business.
Financial information that can be compared across businesses because similar accounting methods have been applied.
The total amounts invested and reinvested in the business by its owners.
The costs of business necessary to earn revenues.
A feature of financial information that allows it to influence a decision.
Earned by selling goods or services to customers.
The amounts owed by the business.
Financial information that depicts the economic substance of business activities.
Unit of Measure
The assumption that states that results of business activities should be reported in an appropriate monetary unit.
Income Tax Expense
Selling and Administrative Expenses
Stockholders Equity/Balance Sheet
The results of transaction analysis in debits-equal-credits format.
A = L + SE; Debits = Credits
The two equalities in accounting that aid in providing accuracy.
An exchange or event that has a direct and measurable financial effect.
Income statement, balance sheet, statement of retained earnings, and statement of cash flows
Four periodic financial statements.
A liability account used to record the obligation to provide future services or return cash that has been received, before revenues have been earned.
A type of asset account used to record the benefits obtained, when cash is paid before expenses are incurred.
Accrual basis accounting
Record revenues when earned and expenses when incurred.
Expense recognition principle
Record expenses when incurred in earning revenue.
Revenue recognition principle
Record revenues when earned, not necessarily when cash is received.
Cash basis accounting
Record revenues when received and expenses when paid.
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