ACCOUNTING CH. 3
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Created by:
melaniehuynh on February 16, 2011
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18 terms
Terms | Definitions |
|---|---|
 Property | anything of value that a person or business owns and therefore controls |
| Financial claim | a legal right to an item |
| Credit | when you buy something and agree to pay for it later |
| Creditor | business or pereson seeling you the item on credit |
| Assets | property or items of value owned by a business |
| Equities | financial claims to assets |
| Owner's Equity | owner's claims to the assets of the business |
| Liabilities | creditor's claims to the assets of the business |
| Accounting equation | ASSETS= LIABILITIES + OWNER'S EQUITY |
| Business transacton | an economic event that causes a change |
| Account | a subdivision under assets, liabilities, or owner's equity |
| Accounts receivable | the total amount of money owed to a business |
| Accounts payable | the amount owed, or payable, to the creditors of a business |
| Investment | money or other property paid out in order to produce profit |
| On account | when a business buys an item on credit |
| Revenue | income earned from the sale of goods or services |
| Expense | the cost of products or services used to operate a business |
| Withdrawl | when a business earns revenue, the owner will take cash or other assets from the business for personal use |
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