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What is an asset?
Property owned by the business to be used for a profit.
What is a liability?
A business' financial obligation that is outstanding and must be paid for.
What is Capital?
The money invested into a business to start and operate the business.
Explain the term 'Expenses'.
Costs incurred by the business to generate revenue and to ensure operation of the business.
What is meant by the term 'Revenue'?
Income gained by the daily operations of the business.
Cash invested into the business.
Cash is debited and Capital is credited.
Sold goods on credit.
Accounts receivable is debited and Sales is credited.
Purchased goods on credit.
Purchases is debited and Accounts Payable is credited.
Paid Insurance using a cheque.
Insurance is debited and Bank is credited.
Bought equipment, paying three quarters by cash and the other quarter by cheque.
Equipment is debited and, Cash is credited and Bank is credited.
