Revenues - ANS Gross increase in equity from a company's business activities that earn
income; also called sales.
Expenses - ANS Outflows or using up of assets as part of operations of a business to generate
sales.
Accounts Receivable - ANS Amounts to be received in the future due to the sale of goods or
services
Accounting Equation - ANS Assets = Liabilities + Equity
Income Statement - ANS describes a company's revenues and expenses along with the
resulting net income or loss over a period of time due to earnings activities
Accounts on Income Statement - ANS Revenues - Expenses
Balance Sheet - ANS Financial statement that lists types and dollar amounts of assets,
liabilities, and equity at a specific date.
Accounts on balance sheet - ANS assets, liabilities, equity
Primary Objective of Financial Reporting - ANS to provide information that is useful to investors
and creditors for decision making
Expanded Accounting Equation - ANS Assets = Liabilities + Common Stock + Revenues -
Expenses - Dividends
FASB (Financial Accounting Standards Board) - ANS sets accounting standards (GAAP) in the
U.S.
T account - ANS debit left, credit right
Normal Balance of Expenses - ANS Debit (decrease equity)
Normal balance of Revenues - ANS credit
Normal Balance of dividends - ANS Dr. (it decreases owner's equity)
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