MAIN Flashcards
Owners equity
The residual interest an owner has in a businesses assets of the entity after the liabilities are deducted.
Revenue
An inflow of an economic benefit in the form of an increase in assets that increases owners equity, except for capital contributions.
Assets
A resource controlled by the entity (as a result of past events), from which future economic benefits are expected.
Expenses
An outflow or consumption of an economic benefit in the form of a decrease in assets that reduces owners equity except for drawings.
Liability
A present obligation of the entity (as a result of past events), the settlement of which is expected to result in an outflow of economic benefits.
Profit
Profit is the surplus left over after expenses are deducted from revenue.
Income statement
An accounting report which details the revenues earned and the expenses incurred during the reporting period.
Statement of receipts and payments
An accounting report which details the cash received and cash paid during the reporting period.
Profit equation
Profit = Revenue - Expenses
