| Account | Record within an accounting system in which increases and decreases are entered and stored in a specific asset, liability, equity, revenue, or expense.
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| Accounting equation | Equality involving a company's assets, liabilities, and equity; Assets = Liabilities + Equity; also called balance sheet equation.
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| Assets | Resources a business owns or controls that are expected to provide current and future benefits to the business.
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| Balance sheet | Financial statement that lists types and dollar amounts of assets, liabilities, and equity at a specific date.
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| Creditors | Individuals and organizations that are entitled to receive payment from a company.
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| Equity | Owner's claim on the assets of a business; equals the residual interest in an entity's assets after deducting liabilities; also called net assets.
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| Events | Those happenings that affect an entity's accounting equation and can be reliably measured.
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| Expanded accounting equation | Assets = Liabilities + Equity; Equity equals [Owner capital − Owner withdrawals + Revenues − Expenses].
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| Expenses | Outflows or using up of assets as part of operations of a business to generate sales.
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| External transactions | Exchanges of value between one entity and another entity.
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| Income statement | Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or losses.
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| Internal transactions | Activities within an organization that can affect the accounting equation.
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| Liabilities | Creditors' claims on an organization's assets; involves a probable future payment of assets, products, or services that a company is obliged to make due to past transactions or events.
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| Net income | Amount earned after subtracting all expenses necessary for and matched with sales for a period; also called income, profit, or earnings.
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| Net loss | Excess of expenses over revenues for a period.
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| Owner, Capital | Account showing the owner's claim on company assets; equals owner investments plus net income (or less net losses) minus owner withdrawals since the company's inception; also referred to as equity
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| Owner investment | Assets put into the business by the owner.
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| Owner withdrawals | Payment of cash or other assets from a proprietorship or partnership to its owner or owners.
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| Revenues | Gross increase in equity from a company's business activities that earn income; also called sales.
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| Statement of owner's equity | Report of changes in equity over a period; adjusted for increases (owner investment and net income) and for decreases (withdrawals and net losses).
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