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7 Cards in this Set
- Front
- Back
Assets - Definition |
1) Ressource 2) Expected to provide future economic benefits |
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Assets - An asset is recognized when |
1) Acquired in a past transaction or exchange 2) Value can be measured with reasonable degree of precision |
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Liabilities - Definition |
1) Claim on assets by "creditors" (non-owners) 2) Represents an obligation to make future payment of cash, goods or services |
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Liabilities - Recognized when |
1) Based on benefits or services received currently or in the past 2) Amount and timing of payment is reasonably certain |
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Stockholders' Equity - Definition |
Residual claim on assets after settling claims of creditors (= Assets - Liabilities) Also known as: - Net worth - Net assets - Net book value |
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Sources of Stockholders' Equity |
1) Contributed Capital (arises from sale of shares) 2) Retained Earnings (arises from operations) |
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Dividends - Definition |
Distribution of retained earnings to shareholders Beware: - Not an expense - Recorded as a reduction of retained earnings on the declaration date |