Intro to Accounting definition

Question 1

Accounting equation

Answer 1

assets = liabilities + equity

Question 2

Accrual

Answer 2

requires companies to record revenues and expenses when they are earned or incurred, rather than when cash is received or paid.

Question 3

Matching principle

Answer 3

expenses are recorded in the same period as the revenues they help generate.

Question 4

Assets

Answer 4

assets represent economic resources that a company owns or controls, which are expected to provide future economic benefits

Question 5

Business entity concept

Answer 5

separates the financial activities of a business from its owners, therefore the business is considered a separate entity.

Question 6

capital expenditures

Answer 6

funds used by a company to acquire, upgrade, or maintain physical assets such as property, buildings, machinery, or equipment. These expenditures are considered investments

Question 7

Cash

Answer 7

Physical cash in the bank account that can be seen.

Question 8

conceptual framework