Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
27 Cards in this Set
- Front
- Back
|
Balance Sheet |
Gives a glimpse into the health and composition of a business |
|
|
Double Entry Bookkeeping |
A transaction requires at least two entries to keep the balance sheet balanced |
|
|
Dual-Aspect Concept |
Assets = Liabilities + Equity If there is a change in the total amount of assets, there needs to be a resulting change in liabilities, equity, or both. |
|
|
Entity |
A business, company, or organization. |
|
|
Entity Concept |
A business' finances are separate from its owner's finances. |
|
|
Going-Concern Concept |
Accounting assumes that an entity will operate indefinitely. |
|
|
Money-Measurement Concept |
Only items expressed as monetary amounts can go on a balance sheet. |
|
|
Assets |
Items owned and controlled by an entity, valuable to the entity, and acquired at a measureable cost. Grouped as current and noncurrent. |
|
|
Current Assets |
Assets expected to be converted into cash or used up by the business within one year. * Accounts Receivable * Inventory * Prepaid Expenses |
|
|
Accounts Receivable |
When a customer purchases goods on credit, the company recoreds it and expects the customer to pay them back in the near future. |
|
|
Inventory |
Goods an entity intends to sell within the near future. |
|
|
Prepaid Expenses |
Monies paid in advance for pending expenses - for example, paying rent in advance. |
|
|
Noncurrent Assets |
Will not be used up or converted into cash for at least one year. * Property, Plant, and Equipment (PP&E) |
|
|
Property, Plant, and Equipment (PP&E) |
Tangible assets that depreciate, or lose value, over time due to wear and tear. |
|
|
Fair Value |
The reasonable amount for which an item could be sold in the marketplace. |
|
|
Cost |
The original amount paid for an item. |
|
|
Liabilities |
Debts owed to outside entities (creditors) in return for borrowed goods, services, or monies. |
|
|
Current Liabilities |
Obligations that will be paid within one year. * Accounts Payable * Estimated Tax Liabilities |
|
|
Accounts Payable |
Obligatory monies owed by an entity for goods and services. The opposite of Accounts Receivable. |
|
|
Estimated Tax Liability |
The estimated amount of what will be due in taxes per year. |
|
|
Long-Term Liabilities |
Obligations that won't be paid until at least a year has passed. |
|
|
Bank Loans (Bank Loan Payable) |
Can be recorded under both current and long-term liabilities. |
|
|
Creditor |
Anyone who lends money or extends credit. |
|
|
Equity |
Money (caplital) either supplied by equity investors or collected in the form of an entity's retained earnings. |
|
|
Retained Earnings |
Income generated by an entity's successful operations that is reinvested in the entity. |
|
|
Paid-In Capitor |
Equity provided by investors. |
|
|
Proprietorship |
An entity with one sole owner and investor. |
