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anything of value that is owned by the business


an amount owed by the business, it's debt

Owner's Equity

the amount remaining after all liabilities are subtracted from assets

Accounting Equation

Assets = Liabilities + Owner's Equity


transaction for the sale of goods or services results in an increase in owner's equity


a decrease in owner's equity resulting from oepration of a business


assets taken out of a business for the owner's personal use


Left side


Right side

Source documents

check, sales invoice, receipt, cash register tape, memorandum

Proving cash

determining that the amount of cash agrees with the accounting records


recording transactions in a journal

Special amount column

journal amount column headed with an account title

General amount column

journal amount column that is not headed with an account title

General Ledger

a ledger that contains all accounts needed to prepare financial statements


transferring information from a journal to a ledger account

Blank Endorsement

Only requires the endorser's signature

Special Endorsement

Transfers ownership of a check to a new owner

Restrictive Endorsement

Further transfers of checks is not allowed

Dishonored Check

Bank refused to pay


computerized cash payments

Debit Card

bank card that automatically deducts the amount of a purchase from a checking account of the cardholder

Petty Cash

amount of cash kept on hand and used to make small payments

Service business

business that performs an activity for a fee


business owned by one person

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