Question: Liability

Answer: an amount owed to a creditor

Question: Owner Investments

Answer: Cash or other assets an owner puts into the business Increase equity

Question: Expenses

Answer: Cost of assets or services used to earn revenue decrease equity

Question: Which of the statements correctly represents the accounting equation?

Answer: what a business owns will always equal what it owes to creditors and owners

Question: Revenues

Answer: sales of products or services to customers by a business increase equity

Question: Asset

Answer: an amount owed, resources with expected future benefits, resources controlled by the business

something of value that a business owns or has title to

Question: Income Statement

Answer: statement describes a business’s revenues and expenses over a period of time

reports the revenues and expenses incurred by a business for a period of time

Question: Importance of accounting

Answer: identifying, recording, communicates financial information & help users make business and financial decisions

Question: Dividends

Answer: outflow of resources to stockholders

Question: Operating Activities

Answer: the everyday activities that occurs in a running business, in selling a product or providing a service