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23 Cards in this Set
- Front
- Back
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Assets Definition |
The resources a business uses to make money. Placed in order of liquidity on balance sheet |
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Liabilities |
Obligations a business has to its creditors, not considered an expense |
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What does the Income Statement do? |
Matches revenue and expenses that were incurred to generate the revenue over an accounting period. "For the year ended December 31, 2016" |
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Dividends Definition |
Not included on the income statement. Portion of earnings distributed to stockholders to reward them for their investments |
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Net Income Placement |
Calculated on the Income Statement, used in Changes of SE |
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Statement of Changes in Stockholder's Equity |
Starts with Beginning Common Stock Add common stock issued to get ending balance Beginning Retained Earnings plus net income, subtract dividends for ending retained earnings. Add two ending balances together "For the year ended..." |
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Balance Sheet |
Assets (in order of liquidity) Total Assets Liabilities (Notes Payable) Stockholder's Equity (common stock & RE) Total Liabilities & SE The two totals should balance.Flows "As of ..." |
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Statements of Cash Flows |
Divided into financing activities, operating activities, and investing activities. Tracks how a company obtains and uses cash Net value for all three calculated separately and totaled to get "net increase in cash", add beginning cash balance and receive ending cash balance |
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Accounts Receivable Definition
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Amount of cash the company is expecting to receive in the future |
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Accounts Receivable Placement |
Increases Assets and SE on Balance Sheet |
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Salaries Payable Definition & Placement |
Represents amount of cash company is obliged
to pay the workers Liability Balance Sheet & Income Statement |
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Calculate Depreciation Expense |
Asset Cost - Salvage Value / Lifespan |
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Depreciation Expense Placement |
On the income statement, increases expenses, decreases net income |
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Unearned Revenue Definition |
Liability because there is an obligation to perform a service |
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Unearned Revenue Placement |
Operating Activity on Cash Flows Liability on Balance Sheet |
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Operating Activities |
Cash receipts from revenues, & cash payments for expenses |
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Investing Activities |
Long term investments. Selling assets, collecting notes receivable. Purchasing assets, and making loans to borrowers |
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Financing Activities |
Borrowing short or long term and SE. Borrowing money and issuing stock, repay debt, dividends, and purchase treasury stock |
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Current Asset |
Short-term asset, expected to be converted into cash within one year or operating cycle |
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Operating Cycle |
Average time it takes a business to convert cash to inventory, to accounts receivable, and accounts receivable back to cash. |
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Current Liabilities |
Those due within a year |
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Classified Balance Sheets Definition |
Determine between current and concurrent items |
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Classified Balance Sheet |
Under Assets section, current assets, property plant & equipment, added together total assets. Under liab & SE, current liabilities, long-term liabilities, stockholder's equity (RE and Comm stock) total liab & SE should = total assets |
