Assets, Liability, Owner's Equity
Accounts receivable
Asset
Building
Asset
Cash
Asset
Equipment, furniture & fixtures
Asset
Land
Asset
Notes receivable
Asset
Prepaid expenses
Asset
Stable monetary-unit
Assumes inflation is zero.
Capital (Debit or Credit?)
Credit
Liability (Debit or Credit?)
Credit
Revenue (Debit or Credit?)
Credit
Assets (Debit or Credit?)
Debit
Expense (Debit or Credit?)
Debit
Withdraw (Debit or Credit?)
Debit
Reliable characteristics
Ensure sources are verifiable e.g. with recipes
Accounts payable
Liability
Accrued liabilities
Liability
Bank indebtedness
Liability
Notes payable
Liability
Assets=
Liability + Owner's Equity
Capital
Owner's equity
Expenses
Owner's equity
Revenues
Owner's equity
Withdrawals
Owner's equity
Going concern
Profitable in the foreseeable future
Economic-Entity Assumption
Separate personal expenses from company's
Definition of accounts payable
The oral or implied promise to pay off debts arising from credit purchases appears in the accounts payable account.
Definition of accounts receivable
Where a business sell it's goods or services in exchange for an oral or implied promise of future cash receipts.
Cost principle
Write down the price of what you pay but not it's worth.
