Definitions (Test)

Contra Account

An account that reduces the balance of a related account. It does the opposite of the normal balance.
👉 Example: Accumulated Depreciation reduces Assets
👉 Contra asset = credit balance
👉 Contra revenue = debit balance

Accounts Payable

Money we owe to other people or businesses.

Accounts Receivable

Money people owe us.

Accumulated Depreciation-Buildings

How much our building has gotten old or worn out.

Accumulated Depreciation-Equipment

How much our tools or machines have gotten old.

Administrative Expenses

Money we spend to keep the office running.

Advertising Expense

Money we spend to tell people about our business.

Amortization Expense

Spreading out the cost of something we can’t touch (like a brand).

Buildings

Places we own, like offices or stores.

Cash

Money we have right now.

Common Stock

Ownership shares people buy in our company.

Cost of Goods Sold

How much it cost us to make or buy what we sold.

Depreciation Expense

How much something like a machine gets older each year.

Dividends

Money we give to the people who own shares of our company.

Equipment

Big tools or machines we use for work.

Freight-In

Money we spend to bring stuff to us.

Freight-Out

Money we spend to send stuff to customers.

Gain on Disposal of Plant Assets

Extra money we make when we sell something old.

Income Tax Expense

Money we pay the government because we made money.

Income Taxes Payable

Taxes we still have to pay.

Insurance Expense

Money we spend to protect our stuff just in case something bad happens.

Interest Expense

Money we pay for borrowing money.

Interest Payable

Interest we still need to pay.

Interest Revenue

Money we make by letting others borrow our money.

Inventory

Things we plan to sell.

Land

Ground or property we own.

Loss on Disposal of Plant Assets

Losing money when we sell something for less than it's worth.

Maintenance and Repairs Expense

Money we spend to fix things.

Mortgage Payable

Money we still owe for buildings or land.

No Entry

We don’t need to write anything down.

Notes Payable

Money we promised to pay back later.

Prepaid Insurance

Insurance we already paid for.

Purchase Discounts

Little savings we get for paying early.

Purchase Returns and Allowances

Money back or discounts when something we bought was wrong.

Purchases

Stuff we bought to sell later.

Rent Expense

Money we spend to borrow space or equipment.

Rent Revenue

Money we earn from letting others use our space.

Research and Development Expense

Money we spend to try new ideas.

Retained Earnings

Profit we keep to grow the business.

Salaries and Wages Expense

Money we pay workers.

Salaries and Wages Payable

Money we still owe workers.

Sales Discounts

Tiny price cuts we give if someone pays fast.

Sales Returns and Allowances

Money we give back when someone returns something.

Sales Revenue

Money we make from selling things.

Supplies

Little things we use to do our work.

Supplies Expense

Money we spent on supplies we already used.

Unearned Service Revenue

Money we got but haven’t done the work yet.

Utilities Expense

Money we spend on lights, water, internet, etc.

Website

Our page on the internet.