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35 Cards in this Set
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- Back
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Is a finacial statement that shows a company's assets, liabilities and shareholder equity |
Balance Sheet |
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Tangible and intangible items that the company owns that have value. |
Assets |
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are physical entities that the business owns (land, buildings, vehicles, equipment, and inventory) |
Tangible assets |
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are things that represent money or value (Accounts Receivables, patents, contracts, and certificates of deposit/CDS) |
Intangible assets |
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Assets are also grouped according to either their ____ or ____ - the speed at which they can be converted into cash. |
life span or liquidity |
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are items that are completely consumed, sold, or converted into cash in 12 months or less. |
Current assets |
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are tangible assets with a life span of at least one year and usually longer. |
Fixed assets |
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might include machinery, buildings, and vehicles. |
Fixed assets |
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are typically not very liquid. |
Fixed assets |
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Examples of ____ include accounts receivable and prepaid expenses. |
current assets |
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Assets are also grouped according to either their life span or liquidity - the speed at which they can be converted into cash. |
Current assets Fixed assets |
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___ are the debts, or financial obligations of a business - the money the business owes to others (e.g. mortgages, vehicle loans). |
Liabilities |
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Classification of Liabilities |
Current Liabilities Long-term liabilities |
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are debts that are paid in 12 months or less, and consist mainly of monthly operating debts. |
Current liabilities |
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__ are typically mortgages or loans used to purchase or maintain fixed assets, and are paid off in years instead of months. |
Long-term liabilities |
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Examples of ____ may include accounts payable and customer deposits. |
current liabilities |
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is of utmost importance to the business owner because it is the owner's financial share of the company - |
Equity |
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may be in assets such as buildings and equipment, or cash. |
Equity |
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is also referred to as Net Worth. |
Equity |
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or that portion of the total assets of the company that the owner fully owns. |
Equity |
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Includes total current assets and all other assets |
Assets |
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total current assets includes: |
Cash Cash equivalent Accounts receivable Assets being sold |
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Includes total current liabilities and all other liabilities |
Liabilities |
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Generally incldes preferred stock values , common stock values, total equity values and par values |
Shareholder's equity |
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is money the business earns from selling a product or service, or from interest and dividends on marketable securities. |
Income |
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is revenue less expenses. |
Net income |
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Other names for income are revenue, gross income, turnover, and the "___" |
top line |
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Other names for net income are profit, net profit, and the "____." |
bottom line |
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The money generated from normal business operations, calculated as the average sales prices times the number of units sold. |
Revenue |
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is "realized" differently depending on the accounting method used. |
Income |
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are temporary or nominal accounts because their balance is reset to zero at the beginner of each new accounting period, usually a fiscal year. |
Income accounts |
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Money the company spends to produce the goods or services that it sells (e.g. office supplies, utilities, advertising, rent, entertainment, and travel. |
Expenses |
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Like revenue accounts, ___ are temporary accounts that collect data for one accounting period and are reset to zero at the beginning of the next accounting period. Most accounting programs perform this task automatically. |
expense accounts |
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When a business uses the Accrual basis accounting method, the revenue is counted as soon as an invoice is entered into the accounting system. If the Cash basis accounting method is used, the revenue is not realized until the invoice is paid. |
Income |
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Most accounting programs perform this task automatically. |
Income account |
