Question

Consider the following accounting terms and definitions and match each term to the definition: Accounting a. an economic resource that is expected to be of benefit in the future

Asset b. debts that are owed to creditors

Balance sheet c. excess of total expense over total revenues

Expense d. excess of total revenues over total expense

Income statement e. the basic tool of accounting, stated as asset=liabilities+equity

Liability f. decreases in equity that occur in the course of selling goods/services

Net income g. increase in equity that occur in the course of selling goods/services

Net loss h. reports on a business’s cash receipts and cash payments during a period

Revenue i. reports on an entity’s assets, liabilities, and stockholders’ equity as of a specific date

Statement of cash flows j. reports on an entity’s revenues, expenses, and net income or loss for the period

Statement of retained earnings k. reports how the company’s retained earnings balance changes from the beginning to the end of the period

Answer 1

ACCOUNTING - e

ASSET - a

BALANCE SHEET - i

EXPENSE - f

INCOME STATEMENT - j

LIABILITY - b

NET INCOME - d

NET LOSS - c

STATEMENT OF CASH FLOWS - h

STATEMENT OF RETAINED EARNINGS - k

Answer 2

Accounting:

The basic tool of accounting, stated as asset=liabilities + equity (e)

Asset:

An economic resource that is expected to be of benefit in the future (a)

Balance sheet:

Reports on an entity’s assets, liabilities, and stockholders’ equity as of a specific date (I)

Expense:

Decreases in equity that occur in the course of selling goods/services (f)

Income statement:

Reports on an entity’s revenues, expenses, and net income or loss for the period (j)

Liability:

Debts that are owed to creditors (b)

Net income:

Excess of total revenues over total expense (d)

Net loss:

Excess of total expense over total revenues (c)

Revenue:

Increase in equity that occur in the course of selling goods/services (g)

Statement of cash flow:

Reports on a business’s cash receipts and cash payments during a period (h)

Statement of retrained earning:

Reports how the company’s retained earnings balance changes from the beginning to the end of the period (k)