Term Definition 1. Accounting equation 2. Asset 3. Balance sheet 4. Expense 5. Income statement 6. Liability 7. Net income a. An economic resource that is expected to be of benefit in the future b. Debts that are owed to creditors c. Excess of total expenses over total revenues d. Excess of total revenues over total expenses e. The basic tool of accounting, stated as Assets = Liabilities + Equity f. Decreases in equity that occur in the course of selling goods or services g. Increases in equity that occur in the course of selling goods or services h. Reports on a business's cash receipts and cash payments during a period i. Reports on an entity's assets, liabilities, and stockholders' equity as of a specific date j. Reports on an entity's revenues, expenses, and net income or loss for the period k. Report how the company's ret. earnings balance changed from the beg, to the end of the period. 8. Net loss 9. Revenue 10. Stmt. of cash flows 11. Stmt. of ret. earnings