Acc 1

Assets

Resources owned by the business

Liabilities

Obligations of the business to pay debts

Equity

Owner’s claim on the assets of the business

Capital

Original and additional investment by the owner

Drawing

Withdrawals by the owner from the business

Income

Revenue generated by the business

Expenses

Costs incurred by the business

Service Income

Revenue earned from providing services

Sales

Revenue earned from selling goods

Salary Expense

Cost of employee wages

Utility Expenses

Costs for utilities like water

Advertising Expense

Cost of promoting the business

Office Supplies Expense

Cost of supplies used in the office

Accounts Payable

Amounts owed to suppliers (verbal agreement)

Notes Payable

Written promise to pay a debt (promissory note)

Unearned Income

Income received before it is earned

Delivery Truck

A tangible asset used for transportation

Furniture and Fixture

Tangible assets used in the business

Land

A tangible asset representing property

Building

A tangible asset representing structures

Cash

Liquid asset available for transactions

Accounts Receivable

Amounts owed to the business by customers (verbal agreement)

Notes Receivable

Written promise from customers to pay a debt (promissory note)

Office Supplies

Assets used for daily office operations

Prepaid Expenses

Expenses paid in advance

Inventory

Goods held for sale

Office Equipment

Assets used for office operations

Computer Equipment

Assets used for computing tasks

Accounting Information System (AIS)

A computer-based method to collect

Completeness

No essential information should be missing

Summarization

Information should be aggregated based on user needs

Relevance

The contents of a report must serve a purpose

Timeliness

Information must be no older than the time of the action it supports

Accuracy

Information must be free from material errors

Financial Position

Information shown on the balance sheet

Results of Operations

Information shown on the income statement

Cash Flows

Information about cash inflows and outflows

Internal Users

Users within the organization (e.g.

External Users

Users outside the organization (e.g.

Accounting

A service activity providing quantitative financial information for decision-making