The accounting equation is most often stated as Assets + Liabilities = Owner's Equity.

After each transaction, the accounting equation must remain in balance.

A negative amount for net worth would reflect more debt than assets, something a creditor would favor.

When two asset accounts are changed in a transaction, there must be an increase and a decrease.

Detailed changes in owner's equity is needed by owners and managers to make sound business decisions.

When items are bought and paid on a future date, we refer to the transaction as on account.

A transaction for the sale of goods results in a decrease in capital.

Keeping separate financial records for the firm and the personal assets of the owner is the application of the accounting concept Business Entity.

An expense is the decrease in owner's equity resulting from the operations of a business.

Payments for items like rent and equipment repairs are recorded in liabilities.

Withdrawals are taken from the firm's assets and are recorded as expenses since they reduce owner's equity.

Assets are located on the ______________side of the accounting equation.

The normal balance for a liability is a ______________ balance.

An increase in a revenue account would be recorded with a _________________.

In accounting, the word debit means ________________ side.

A decrease in a vendor's (someone we owe) account is made with a _________________.

When a payment is made for an expense, the entry would _________________ the cash account.

Capital, owner's equity, or net worth are all found on the _________________ side of the accounting equation.

The normal balance for a draw account would be a _______________.

The normal balance for accounts receivable is a _____________.