Accounting City Exam Flashcards
The balance sheet is also called
The statement of financial position
Owners equity is also called
Proprietorship or Net worth
The balance sheet consists of
Assets, Liabilities and owners Equity
When a sale occurs revenue increases
Assets and Equity
The income statement shows the results of
Business operations for a specific period of time. Eg month, year and quarter
Income statement is also known as
Profit and loss statement
When revenue and expenses equal the firm is said to
Break even
The formula for straight line depreciation
Cost - Salvage value/Estimated Useful Life
Depreciable Base is
Cost minus salvage value
Prepaid expense also known as
Deferred Expense
Examples of Prepaid or Deferred expense
Prepaid supplies
Prepaid insurance
Prepaid interest in notes payable
Accrued Expenses examples
Accrued salaries
Accrued payroll taxes
Accrued interest on notes payable
Unearned Income or deferred income
Cash is received before income is earned
The order in which financial statements are prepared
- Income statement
- Statement of Owners Equity
- Balance Sheet
