Account Summary Flashcards

Studying for Accounting

Assets

Resources owned by a business or individual that have economic value and can be converted into cash. These can include cash, property, equipment, inventory, and investments.

Liabilities

Obligations or debts owed by a business or individual to outside parties, which must be settled over time through the transfer of economic benefits. This includes loans, payables, and unearned revenue.

Equity

The remaining interest in the assets of a business after factoring in liabilities, representing the owner's stake. This can include common stock, retained earnings, and additional dividends.

Revenue

The total income generated by a business from its operations, typically from the sale of goods or services, before any expenses are deducted.

Expenses

Costs incurred by a business in the process of earning revenue, including wages, renting fees, utilities, and insurance expenses. These costs are essential for day-to-day operations and must be managed to ensure profitability.

Balance Sheet

A financial statement that provides a snapshot of a company's assets, liabilities, and equity at a specific point in time, showing the financial position of the business.

Income Statement

A financial report that summarizes a company's revenues, expenses, and profits or losses over a specific period, typically used to assess overall financial performance.

Corporation

a legal entity recognized by law as separate from its owners, providing limited liability protection and the ability to raise capital through stock.

partnership

A business structure in which two or more individuals share ownership and management responsibilities, as well as profits and losses.

Sole proprietorship

LLC