Accounting Terminology

invesment – assets put into the business by owner.
Liability accounts – Accounts payable,
assets are increased by… – -cash
-accounts receivable
Income – Increases in the owner's equity resulting from business operations is known as
Limited liability – if the business fails the owner's personal assets may not be used to repay the debts of the business.
accounting – the process of identifying, measuring, and communicating economic information to various users
In the postabsorptive state
Drawing Account – account from which owner takes money or assets from the business from personal use (withdrawals)
sold inventory – cost of goods sold (COGS)
Cash Discount – A deduction that a vendor allows on the invoice amount to encourage prompt payment.
Know the difference between internal and external users of accounting information. – 1.INTERNAL DIRECT IMPACT IN PRCESS OF FINANANCE
capital stock – indicates the owners' contributions to a corporation
Compound Journal Entry. – An accounting entry that involves more than two accounts.
In the pоstаbsоrptive stаte
operating assets – cash, accounts receivable, inventory, plant & equipment

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