E1-14 Using accounting vocabulary [10–15 min]

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TERMS: DEFINITIONS:

1. Accounting Equation A. An economic resource that is expected to be of benefit in the future

2. Asset B. An economic obligation (a debt) payable to an individual or an organization outside
the business

3. Balance Sheet C. Excess of total expenses over total revenues

4. Expense D. Excess of total revenues over total expenses

5. Income Statement E. The basic tool of accounting, stated as Assets = Liabilities + Equity

6. Liability F. Decrease in equity that occurs from using assets or increasing liabilities in the
course of delivering goods or services to customers

7. Net Income G. Amounts earned by delivering goods or services to customers

8. Net Loss H. Report of cash receipts and cash payments during a period

9. Revenue I. Report of an entity’s assets, liabilities, and equity as of a specific date

10. Statement of Cash Flows J. Report of an entity’s revenues, expenses and net income/net loss for the
period

11. Statement of Retained Earnings K. Report that shows the changes in retained earnings for a period of time