Terms Flashcards
define accounts receivable (accrued revenues)
money that customers owe to the company
inventory
goods available for sale, valued at the lower of the cost or market price
prepaid expenses
expenses that are already paid for such as insurance, advertising contracts or rent
accounts payable
amount that a company owes to creditors and suppliers
notes payable
a written note where a borrower promises to repay the lender
service revenue
income a company generates in return for completing a service
unearned revenue
money received by the company from a customer in advance where there’s no service or product provided yet
capital
money used to build, run or grow a business
Define asset
A resource that provides economic value to a business owner.
Define liability
An amount that is owed
Define equity
The value that would be returned to a company’s shareholders
Define retained earnings
Equity resulting from profitable operations
Revenue
An increase in assets from goods and services
Expense
A decrease in assets resulting from goods and services
Dividends (withdrawals)
A distibution of profits to owners
