ACFAR IFA Topic 2 (Definition)

Recording a single transaction in the double-entry accounting records may

Decrease the balance on a liability account by a given amount and decrease the balance on an asset account by the same amount.

It creates an outward or potential outward flow of assets.

Expense

When a business entity receives payment before rendering services or delivering goods, the account is credited to

Unearned revenue

The basic unit to record all business transactions.

Account

The future benefits embodied in an asset may flow to the enterprise in a number of ways. Which is the exception?

An asset may be used to convert an obligation to equity.

Financial events that occur in a business are termed?

Transactions

Hannah Angels bought supplies from SM. This is own as a _______ transaction.

cash

Expenses can be defined as

decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in the decreases in equity.

The double-entry recording rule states that every transaction, total debits must ___ total credits. In addition, every transaction affects at least ___ ledger accounts.

equal, two

The accounting equation

shows the claims on the entity's assets by both the creditors and owner