Accounting Basics Flashcard

Front

What is the primary purpose of accounting?

Back

To measure financial performance

Front

Which financial statement shows a company’s financial position at a specific point in time?

Back

Balance Sheet

Front

Assets = Liabilities + ________?

Back

Equity

Front

The process of recording transactions is called:

Back

Journalizing

Front

Which account is an asset? Options: Accounts Payable, Retained Earnings, Cash, Revenue

Back

Cash

Front

What is double-entry accounting?

Back

Recording each transaction in two accounts

Front

Liabilities are best described as:

Back

Obligations owed to creditors

Front

Which principle requires recording expenses in the same period as related revenues?

Back

Matching Principle

Front

An increase in an expense account is recorded as:

Back

A debit

Front

What is the normal balance of a liability account?

Back

Credit