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25 Cards in this Set

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  • Back
A balance sheet is a listing of an entitiy's ________,______________, & ______________ at a point in time
Assets, Liabilities, Owners Equity
A snapshot of the company
Balance Sheet (July 23,2007)
Balance sheet Equation
Assets = Liabilities + Owners Equity (A=L+OE)
Liabilities are
what you owe
Examples of Assets are
Cash, Accounts Receievable, Inventory, Equipment, Accumulated Depreciation
Assets are
things you own
Examples of Liabilities are
Accounts payable, Notes Payable, Accured Liabilities
Owners Equity is the
Ownership right of the owner of the entity in the assets that remain AFTER DEDUCTING the liabilities
Owners equity is sometimes referred to as
Net Worth
An example of an owners equity is
Own a home with a mortgage
An income statement tells you
How much you made at business
The formula for the income statement is
Revenues-Expenses=Net Income
Income statements are
Reports over a PERIOD OF TIME (Monthly, Yearly, ETC)
The first line in the income statement will always be the
Net Sales
The Four required financial statements are
Balance Sheet, Income Statement, Statement of Cash Flows, and Statement of Changes in Owners Equity
What are the categories of the Income Statement?
Net Sales; Cost of Goods Sold, Gross Profit, and General and Administrative Expenses
What are the Statement of Changes in Owners Equity?
It explains the detail of equity accounts and the changes occurring during the period

EX: Went up because of _____
Went down because of ____
What is Owners Equity?
Paid in Capital + Retained Earnings
Statement of Cash Flows is broken out into 3 categories, name them
Operating, Investing, and Financing
Explain all equations to know
Assets = Liabilities + Owners Equity (A=L+OE)

Owners Equity= Paid in Capital + Retained Earnings (OE=PIC+RE)

Retained Earnings=Beginning balance of Retained Earnings + Net Income - Dividends (RE=BBRE + NI - DIV)

Net Income = Revenues - Expenses
What is "Matching"
to reflect accurately the entity's results, you must match the expenses with the revenues
recognizing revenue at the point of sale and expenses when they are incurred, even though the cash transaction is at a different time
Check book
Full Disclosure:
Required to fully explain financial statements
Some items are too small to worry about, so they are left incorrect (rounding, errors)