Ch. 1 The Accounting Equation
Factors of liabilities
Accounts Payable
Factors of assets
Cash Accounts Receivable Supplies Equipment
Expenses
Costs of providing products and services to customers
Define: Liabilities
Creditors' claims on assets; debts
Owner Investments
Inflows of resources that an owner puts into a company
Net Loss
Occurs when expenses exceed revenues; decreases equity
Net Income
Occurs when revenues exceed expenses; increases equity
Equity
The owner's claim on assets, and is equal to assets minus liabilities.
The Accounting Equation
Assets = Liabilities + Equity
Owner Withdrawals
Outflows of resources that an owner takes from the company
Factors of equity
Owner Investments Owner Withdrawals Revenues Expenses
Factors that INCREASE equity
Owner Investments Revenues
Factors that DECREASE equity
Owner Withdrawals Expenses
Define: Assets
Resources a company owns Something I own, has value, and benefits the future
Revenues
Sale of products and services to customers