Financial Accounting Basics
Curated Accounting deck. Add it to your library and study with spaced repetition.
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What is the accounting equation?
Assets equal liabilities plus owners' equity.
What is an asset?
A resource owned by a business that has future economic value.
What is a liability?
An obligation or debt the business owes to others.
What is owners' equity?
The owners' residual claim on assets after liabilities are subtracted.
What is revenue?
Income earned from a company's normal business activities.
What is an expense?
The cost incurred to generate revenue.
What is net income?
Revenue minus expenses over a period; the bottom line.
What are the three main financial statements?
The income statement, balance sheet, and cash flow statement.
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