| A | B |
|---|
| ACCOUNT | summarizes all the info pertaing to a single item in the accounting equation |
| ASSETS | anything that is owned |
| BALANCE SHEET | assets, liabilities, and owner's equity on a specific date |
| EXPENSE | decrease in owner's equity from the operation of the business |
| LIABILITIES | anything that is owed |
| OWNER'S EQUITIES | what the business is worth to he owner (assets-liabilities) |
| REVENUE | increase in owner's equity from the operation of the business |
| TRANSACTION | business activity that changes assets, liabilities, or owner's equity |
| WITHDRAWAL | assets taken out of the business by the owner for personal use |
| TWO TRANSACTIONS THAT INCREASE OWNER'S EQUITY | Investment & Revenue |
| TRANSACTIONS THAT DECREASE OWNER'S EQUITY | Withdrawal & Expense |
| INCREASE | always _______ on the balance side |
| DECREASE | always _______ on the side opposite |
| 1st STEP WHEN ANALYZING A TRANSACTION | ask "what accounts will be affected?" |
| 2nd STEP WHEN ANALYZING A TRANSACTION | ask "what is the balance side of the account?" |
| 3rd STEP WHEN ANALYZING A TRANSACTION | ask "will the balance be increased or decreased?" |
| 4th step WHEN ANALYZING A TRANSACTION | ask "will the account be debited or credited?" |
| T-ACCOUNTS THAT HAVE BALANCE SIDE ON THE LEFT SIDE | all assets, owner's drawing, & all expenses |
| T-ACCOUNTS THAT HAVE BALANCES ON THE RIGHT SIDE | all liabilities, owner's capital, & all revenue |
