Chapter 1, Problem 30P

Match the terms (identified as a through r) with the definitions and phrases (marked 1 through 16). For example the term “a. Assets” matches with definition “15. Equal to liabilities plus stockholders’ equity.”

a. Assets	1. The economic benefit (increase in assets) gained by providing goods or services to customers.
b. Common Stock	2. Investors who purchase common stock.
c. Creditors	3. The economic sacrifice (decrease in assets) incurred in the process of providing goods or services to customers.
d. Dividend	4. Created when a company borrows money from a bank.
e. Elements	5. Assets minus liabilities and retained earnings.
f. Expense	6. Occurs when expenses exceed revenues during the year.
g. Financing Activity	7. Individuals or institutions that have loaned goods or services to a business.
h. Investing Activity	8. Primary components of financial statements including assets, liabilities, stockholders’ equity, common stock, revenue, expenses, distributions, and net income.
i. Liability	9. Occurs when revenue exceed expenses during the year.
j. Net Income	10. Assets minus liabilities.
k. Net Loss	11. The section of the statement of cash flows that reflects cash paid for expenses.
l. Operating Activity	12. The section of the statement of cash flows that reflects cash collected from the issue of stock.
m. Retained Earnings	13. The section of the statement of cash flows that reflects cash paid to purchase land.
n. Revenue	14. The item shown on the statement of changes in stockholders’ equity that represents a transfer of wealth from a business to its owners.
o. Stockholders	15. Equal to liabilities plus stockholders’ equity.
p. Stockholders’ Equity	16. A stockholders’ equity account that contains the amount of net income earned minus dividends paid since the inception of the business.