ac 210 - chapter 2
resources presently owned by a business that generate future economic benefit
Assets
balance sheet formula
Assets = Liabilities + Stockholders' Equity
every transaction has at least two effects on the basic accounting equation
Duality of Effects
exchanges involving assets, liabilities, and stockholders' equity that you can see between the company and someone else
External Exchanges
events occurring within the company, for example, using some assets to create an inventory product
Internal Events
amounts presently owned by a business to creditors
Liabilities
the amount invested and reinvested in a company by its shareholders
Stockholders' Equity
___ assets will be used up or converted into cash within the next 12 months
current
current ratio
current assets/current liabilities
liability accounts ___ on the right or ___ side and ___ on the left or ___ side
increase, credit decrease, debit
stockholders' equity accounts ___ on the right or ___ side and ___ on the left or ___ side.
increase, credit decrease, debit
asset accounts ___ on the left or ___ side and ___ on the right or ___ side
increase, debit decrease, credit
___ assets include resources that will be used or turned into cash more than 12 months after the balance sheet date
long-term
a ___ is a business activity that affects the basic accounting equation
transaction