Assets, Liability, Owner's Equity

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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.


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