ACC 201 Chapter 1 Vocab

Net income

total revenue less total expenses

asset

something of value a business owns

transaction

an exchange of resources, goods or services between parties for value

revenue

value earned by a business for providing goods or service between parties for value

entity assumption

white the owners of sea horse boats had several businesses, they maintained the results of each business separetly

GAAP

all the rules an accountant must follow in preparing financial statement

liability

amounts owed to others by a business

monetary unit assumption

accountants prepare financial repots in dollars because ts simple and understandable

periodicity assumption

the balance sheet and income statement present the results of operation for the quarter ended March 31, 20XX