Accounting Chapter 3
_______ refers to the dollar amount of the owner's equity in the business
capital
The owner's personal financial transactions are part of the business's records
false
____ are the creditor's claims to the assets of the business.
liabilities
The owner's claims to the total assets of the business are called ____.
owner's equity
_____ is anything of value that is owned or controlled
property
The costs of goods and services used to operate a business are
expenses
Buying ____ is the same as buying on credit.
on account
A (n) ___________ is any property or item of value owned by a business.
asset
_____ is income earned from the sale of goods and services
revenue
A business transaction affects at least two accounts
True
_________ is the total amount of money to be received in the future for goods an services sold on credit
Accounts receivable
A person who has control over but does not own an item of property has a legal right to that item
False
Both businesses and individuals may own and control property
True
One of the purposes of accounting is to provide financial information about property and the rights to that property.
True
The accounting equation should remain in balance after each transaction
True
When the owner takes cash or other assets from the business for personal use, a ____ occurs.
Withdraw
The increases or decreases in a specific item caused by business transactions are recorded in an
account
The ____ is Assets = Liabilities + Owner's Equity.
accounting equation
The amount of money owed to the creditors of a business
accounts payable
A __________ is an economic event that causes a change in assets
business transaction
A person or business that sells property on credit, or any person or business to which money is owed, is called a
creditor
The total financial claims to the assets of a business are known as
equities
"Assets + Liabilities = Owner's Equity" is another way to express the basic accounting equation.
false