records which collect specific business transactions

owned company resources which have dollar values

money owed by a company

the value of the stockholders' claims to the assets of a business

left side of the accounting equation (assets)

right side of the accounting equation (liabilities and stockholder's equity)

directory which groups the accounts used in a business

earnings for work completed or goods delivered

payments made to help the company earn revenue

visual display of a transaction's effect on an account; debits are on the left side and credits are on the right side

accounting rule where at least two accounts are always affected by every transaction; at least one account must be on the debit side and one account must be on the credit side

balance an account type is always expected to have; the side of the accounting equation where an account is normally found

business which works for a customer and does not provide tangible goods

physical object

goods which are not physical objects such as services

process of recording accounting procedures in an accounting period

proves a transaction occurred

form for recording transactions in chronological order

collection of all accounts in a business

transferring information from the journal to the ledger

list of all accounts and their balances at a certain point

record of financial transactions which change the balance of some accounts

formal reports of company activities which are viewable by the public

Income Statement

financial report which shows how profitable a company is during a certain accounting period; displays revenues, expenses, and net income

Retained Earnings

earnings maintained by the company for financial growth

Statement of Retained Earnings

financial statement outlining the changes in retained earnings for a certain period

Balance Sheet

external (public) financial statement showing a company's financial position at a certain time; assets, liabilities and stockholder's equity are recorded on this document

Statement of Cash Flow

financial statement which reports cash generated and used by a company

Operating Activities

receiving cash from revenue/paying expenses

Investing Activities

using cash for assets

Financing Activities

receiving cash from owners/paying owners