Accounting 2

Question 1

accounts receivable

Answer 1

• business has right to the property until customer pays it off
• money owed to business from customer purchasing items on credit/on account
• ex. boscov’s customer using charge card

Question 2

cash or goods used to generate income either by investing in a business or a different income property

Answer 2

capital

Question 3

depreciation

Answer 3

decrease in value of property as it becomes old and gradually wears out

Question 4

assets

Answer 4

something a business or person owns of value

Question 5

liquid asset

Answer 5

asset that can easily be converted to cash

Question 6

What is the asset equation?

Answer 6

Assets = Liabilities + Owners Equity

Question 7

liability

Answer 7

• money you own for something - ex. car loan, mortgage
• buy now pay later

Question 8

examples of notes payable

Answer 8

mortage payable

taxes payable

Question 9

examples of items that appreaciate

Answer 9

house

land

antiques

Question 10

items available for sale

Answer 10

inventory

Question 11

exampes of items that depreciate

Answer 11

cars

electronics

computers

Question 12

cash

Answer 12

all monetary items

ex. bank deposits, currency, coins, checks, money orders

Question 13

economic event that causes a change in assets, liabilities or owner’s equity

Answer 13

business transaction

Question 14

inventory

Answer 14

• items available for sale (on shelves or in backrooms)
• ex. best buy’s tvs in store

Question 15

general incrase in value of property that occurs over time

Answer 15

appreciation

Question 16

financial claim

Answer 16

who has the right to use something

ex. taking away your car by bank if you do not pay loan

Question 17

double entry accounting

Answer 17

where each transaction affects at least 2 accounts

Question 18

subdivision under assets, liabilities or owner’s equity that summarize charges and shows balance for a specific item

Answer 18

account

Question 19

what goes under liabilities column

Answer 19

accounts payable

Question 20

what goes under assets column

Answer 20

• supplies
• cash in bank
• inventory
• equipment
• account receivable
• anything that can be converted to cash
• accounts

Question 21

account

Answer 21

subdivision under assets, liablities or owner’s equity that summarize charges and shows balance for a specific item

Question 22

owners equity

Answer 22

value of owner’s investment

Question 23

accounts receivable

Answer 23

• aka A/R
• money owed to businesses from customers purchasing items on credit or on account

Question 24

appreciation

Answer 24

general increase in value of property that occurs over time

Question 25

examples of assets

Answer 25

car, house, suitcases, perfume, airplanes

Question 26

anything of value a business or person owns and controls

Answer 26

property

Question 27

where each transaction affects at least 2 accounts

Answer 27

double entry accounting

Question 28

examples of office supply

Answer 28

computer copier pens pencils stapler etc

Question 29

written promise to pay money owed at specified times

Answer 29

notes payable

Question 30

value of owner's investment

Answer 30

owner's equity

Question 31

accounts payable

Answer 31

* purchasing on account * purchasing goods and or services on account * ex. target purchased cheetos inventory from frito-lay on account

Question 32

property

Answer 32

anything of value a business or person owns and controls

Question 33

business transaction

Answer 33

economic event that causes a change in assets, liabilities or owners equity ex. buy a movie ticket - your assets decrease (cash) and the theaters assets increase

Question 34

who has right to use something, legal right to property

Answer 34

financial claim

Question 35

notes payable

Answer 35

* aka promissory note * written promise to pay money owed at specified times

Question 36

what goes under owners equity

Answer 36

* revenue + * expense - * owner's name and capital

Question 37

money owed to businesses from cusotmers purchasing items on credit/on account

Answer 37

accounts receivable

Question 38

capital

Answer 38

cash or goods used to generate income either by investing in a business or a different income property

Question 39

money owed to businesses from customers purchasing items on credit or on account

Answer 39

accounts receivable

Question 40

purchasing on account

Answer 40

accounts payable

Question 41

decrease in value of a property as it becomes old and gradually wears out

Answer 41

depreciation

Question 42

money you owe for something

Answer 42

liability

Question 43

something a business or person owns of value

Answer 43

assets