| A | B |
|---|
| The accounting system that reveals the financial position of a business | financial accounting |
| Anything of value owned and controlled by a business | property (assets) |
| the legal right over the property or interest on the property | financial claim |
| property owned by a business | assets |
| when we owe a creditor (financial claim) | liability |
| any economic activity or event that affects finances | business transaction |
| all monies due from customers or clients | Accounts Receivable (A/R) |
| record of the business income (quite often through the sale of goods) | revenue |
| These are permanent accounts | Owner's Equity, liabilities and assets |
| These are temporary accounts | Revenue, expenses and withdrawals |
| owner’s contribution to an asset (or property) | internal equity (capital) |
| outsider’s contribution to an asset (or property) | external equity (liability) |
| total property or assets will always equal this | financial claims |
| buying or selling on account | credit transaction |
| These two temporary accounts each decrease owner's equity | withdrawals and expenses |
| This temporary account increases owner's equity | revenue |
| list of all account names and numbers used to classify accounts | chart of accounts |
| every transaction represents two types of activities: debit activity and credit activity (equally) | double entry system |
| Prepared to analyze transactions | T account |
| account that ends with a zero balance | temporary account |
| a withdrawal affects which permanent account | Owner's Equity |
| the left side of the t-account | debit |
| the right side of the t-account | credit |
| these accounts have normal credit balance | liabilities and owner's equity |
| The typical name for a liability account | Accounts Payable |
