Balance Sheet Flashcards
Current assets generally contain the following 5 line items:
Cash Accounts Receivable Inventory Pre-paid expenses Other Current Assets (tax refund, funds deposited but uncollected, notes receivable collectible within 12 months)
Current Assets can be defined as:
Primarily used in operations
Converted to cash within 12 months
Long- Term Assets generally are:
Assets used in operations but needed to manufacture, display, warehouse and transport goods which are sold by the company to generate sales.
Life span longer than 12 months
Long-term assets are typically made up of the following line-items:
Net fixed assets Notes receivable Investments in or advance of subsidies Intangibles Other fixed assets (trucks, autos - net of accumulated depreciation)
Current Liabilities
Provide a source of cash for operations from short-term debts, accounts payable, accruals and taxes
Must be paid within 12 months
Current liabilities generally are a sum of the following:
Note payable (due to bank) Note Payable (other) due to suppliers Accounts Payable (suppliers) Accruals Income tax payable Current portion of long term debt Other current liabilities
Net Worth
The financing of a company’s assets provided by the owners of a business. Net worth may be affected by many transactions including:
Profits reinvested
Dividends paid
Equity withdrawn
New equity raised
Net Worth may generally be a sum of 7 areas:
Common stock Capital surplus Retained Earnings Treasury Stock Total Net Worth THE TOTAL of total liabilities and net worth Contingent liabilities
