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accounting 101
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14
Accounting
Not Applicable
01/08/2014

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Term
accounting
Definition
a system, including its design and internal controls, that accounts, records, summarizes, interprets and reports all financial transactions of an organization.
Term
Fundamental accounting equation
Definition
Assets=Liabilities+Owner's Equity
Term
Assets
Definition
All sellable business possessions; everything company owns of value including cash
Term
Liabilities
Definition
All a business owes
Term
Owner's equity
Definition
Seed money; cash invested in a business
Contributed Capital + Retained earnings or funds available if a company were to sell its assets and pay all liabilities
Term
Retained Earnings
Definition
profit - expenses
Term
matching principles
Definition
expense and revenue should match
Term
3 main types of assets
Definition
current assets, capital assets, intangible assets
Term
financial report is these two things
Definition
balance sheet and income statement
Term
revenue
Definition
total income received from sales, interest, dividends, etc
Term
net income (profit)
Definition
difference between an organizations total revenue and its total expenses for a given time period
Term
Income statement format
Definition
Name
Income for year ended [ date ]
Sales Revenue [tab] $XX
Expenses
[tab]item1 [tab] (XX)
[tab]item etc [tab] (XX)
TOTAL INCOME[tabtab]($XX)underlinedx2
Term
retained earnings
Definition
The continued profit part of owner's equity.
Term
cash accounting
Definition
money is not written into the books until it is in hand or spent
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