Chapter 3 outline

Question 1

The relationship between assets and the two types of equities (liabilities and owner’s equity). All accounts for a business are classified under one of the 3 sections of this.

Answer 1

Accounting equation

Question 2

What is the accounting equation?

Answer 2

Assets = Liabilities + Owner’s equity

Question 3

All of the property owned by a business

Answer 3

Assets

Question 4

the debts that the business currntly has outstanding to lenders or other businesses

Answer 4

Liabilities

Question 5

The business’s ownership interests in its assets after all debts have been repaid

Answer 5

Owner’s equity

Question 6

An economic event that causes a change either an increase or a decrease in assets, liabilities, or owner’s equity

Answer 6

Business Transactions

Question 7

Via check or cash

Answer 7

Cash

Question 8

Business or customers buy something and will pay it back over time

Answer 8

Credit

Question 9

money or property put into a business by business owners

Answer 9

investment

Question 10

Day to day transactions involved in running a business

Answer 10

expense

Question 11

Sales transactions from selling goods or services ($ coming in)

Answer 11

revenue

Question 12

when cash or assets are removed from the business for the owner’s personal use

Answer 12

withdrawls

Question 12

affected by cash and check transactions

Answer 12

cash in bank

Question 12

property of value that the business owns and aids in operating the business

Answer 12

land, property and equipment

Question 12

the amount of $ owed to a business

Answer 12

accounts receivable

Question 12

the amount owed, or payable to the creditors of a business

Answer 12

accounts payable

Question 12

when business owners put investments (cash or property) into their company

Answer 12

capital