| A | B |
|---|
| Business Transaction | a financial event that affects assets, liabilities, or owner's equity |
| Drawing | a subelement decreasing owner's equity and resulting from the owner's withdrawal of assets for personal use |
| Commissions | the fees a business charges for buying or selling goods (real estate) |
| Revenue & Expense Transactions | financial events that determine the profit/loss of a business |
| Accounts Receivable | an asset representing amounts due from customers |
| Revenue Principle | revenue must be reconginzed as at the time of the sale of goods, or as at the time of the rendering of services |
| Expenses | costs incurred by a business in earning revenue |
| Revenue | an inflow of assets resulting from the sale of good or services |
| Expense Principle | expenses must be recognized and recorded when they are incurred |
| Matching Principle | revenues and expenses must be correlated to report the net income (net loss) for an accounting period |
| Net Income | the excess of revenue over expenses |
| Net Loss | the excess of expenses over revenue |
| Heading | who, what, when |
| Income Statement | financial report that matches revenue and expenses for a specific accounting period |
| Sales | the main source of revenue for firms that sell goods |
| Fees Earned | the main source of revenue for professionals such as doctors and lawyers |
