Accounting Intro/Assets Review

accounting

systematic process of recording, summarizing, analyzing, and reporting financial transactions of a business. often called the language of business

key components of accounting

recording, classifying, summarizing, reporting

service business

an intangible service that has no physical form

merchandising business

a company that buys finished products from manufacturers or wholesalers and resells them to customers for a profit

manufacturing business

turns raw materials into new products

accounting equation

assets=liabilities+equity

asset

is something of value that a company expects will provide future benefit

current asset types

cash, inventory, accounts receivable

liquid asset

something you own that can be quickly turned into cash without losing much value such as cash in a bank, money in a checking account, stocks

intangible assets

non physical asset with value such as patent, trademark, copyrights, goodwill