Accounting Principles

These flashcards cover fundamental vocabulary related to accounting principles discussed in the lecture.

Assets

Resources owned by a business that provide future economic benefits.

Revenue

Income generated from normal business operations, typically from sales of goods and services.

Expenses

Costs incurred in the process of earning revenue.

Net Income

The total earnings of a business after all expenses have been deducted from revenues.

Retained Earnings

The cumulative amount of net income retained in the company after dividends are paid.

Accounts Receivable

Money owed to a company by its customers for goods or services sold on credit.

Equity

The value of ownership interest in a business, represented by the owner's claims on assets.

Cash Flow

The net amount of cash being transferred into and out of a business.

Accounting Equation

The equation that represents the relationship between a company’s assets, liabilities, and equity: Assets = Liabilities + Equity.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and equity at a specific point in time.