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