19 terms

Accounting Chapter 3

Items of value that are owned or controlled by a business.
Property Rights
Creditors' and owners' financial claims to the assets of a business.
Financial Claims
Legal rights to an item.
An agreement to pay for a purchase at a later time.
A person or business that has a claim to the assets of a business.
Property or items of value owned by a business.
Those assetsowned by a business but not used in the operation of the business.
The total financial claims to the assets, or property, of a business.
Owner's Equity
Owner's claims to the assets of the business.
Amounts owed to creditors; the claims of creditors to the assets of the business.
Accounting Equation
The basis for keeping all accounting records in balance. Assets=Liabilities+Owners Equity.
Business Transaction
A business event, such asthe buying, selling, or exchange of goods, that causes a change in the assets, liabilities, or owners equity of a business.
Subdivision under the three sections of the accounting equation used to summarize increases and decreases in assets, liabilities, and owners equity.
Accounts Receivable
The total amount of money owed to a business.
Accounts Payable
The amount of money owed, or payable, to the creditors of a business.
On Account
When a business or individual buys an item on credit.
Income earned from the sale of goods and services.
The cost of the goods or services that are used to operate a business; expenses decrease owners equity.
The removal of cash or another asset from the business by the owner for personal use.