Accounting Terminology
Listed Below Are Nine Technical Accounting Terms Introduced

question 99

Essay

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:
$\begin{array}{|l|l|l|}\hline \text { Assets } & \text { Accounting equation } & \text { Inflation } \\\hline \text { Balance Sheet } & \text { Liabilities } & \text { Going concern assumption } \\\hline \text { Cost principle } & \text { Equity } & \text { Liquidity } \\\hline\end{array}$ Each of the following statements may (or may not) describe one of these technical terms. In the space provided below each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms. Do not use a term more than once.
(A.) Having the financial ability to pay debts as they become due.
(B.) An assumption that a business will operate in the foreseeable future.
(C.) Economic resources owned by businesses that are expected to benefit future operations.
(D.) The debts or obligations of a business organization.
(E.) Assets - Liabilities = Equity
(F.) The principle which states that assets are valued in the balance sheet at their historical cost.
(G.) A residual amount equal to assets minus liabilities.

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Definitions:

Leased Asset

An asset that is used by a lessee under the terms of a lease agreement with the lessor, who retains ownership.

Residual Value

The estimated amount that an asset is expected to realize at the end of its useful life, minus any anticipated disposal cost.

Sales-Type Lease

A lease arrangement where the lessor recognizes sales revenue at the inception of the lease, often used in lease agreements for property, plant, and equipment.

Manufacturer's Or Dealer's Profit

The profit margin that a manufacturer or dealer earns from producing or selling goods, typically calculated as the difference between the cost of production and the sale price.