The Balance Sheet

Question 1

Assets

Answer 1

A PRESENT economic resource owned by the firm as a result of a PREVIOUS event, and will have a FUTURE economic benefit

Question 2

Liabilities

Answer 2

A PRESENT obligation of the entity, as a result of a PAST event, and will cause a FUTURE outflow of economic benefit.

Question 3

Balance Sheet Equation

Answer 3

Assets= Liabilities +Owner’s Equity
OR
Owner’s Equity= Assets - Liabilities

Question 4

Owner’s Equity

Answer 4

The residual interest in the assets of an entity after the deductions of liabilities

Question 5

Revenues

Answer 5

Increases in assets or decreases in liabilities that result in an increase in Owner’s Equity.
NOT INCLUDING CAPITAL INJECTIONS

Question 6

Expenses

Answer 6

Decreases in Assets or Increases in liabilities that result in a decrease in Owner’s Equity.

NOT INCLUDING DRAWINGS

Question 7

Equities

Answer 7

Claims on the Assets of a business, consisting of both Liabilities and Owner’s Equity

Question 8

Balance Sheet

Answer 8

an Accounting Report that details the business’s assets, liabilities and owner’s equity at a particular point in time

Question 9

Double-Entry Accounting

Answer 9

a system that records at least two effects on the Accounting Equation as a result of each transaction