Balance Sheet Flashcards
is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
Asset
present obligations of the entity arising from the past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
Liabilities
is the residual interest in the assets of the entity after deducting all its liabilities.
Equity
Common Asset: coins, currency, checks
Example: The amount in a company’s checking account.
Cash
an economic resource arising from providing goods or services to a customer on account.
Example: The company providing a consulting service to a client on account will give rise to the company accounts receivable from the client.
Accounts Receivable
items that are purchased or manufactured by a company and will be resold.
Example: The items you see on the shelves in Carrefour.
Inventory
structures used in the operations of a business.
Example: The physical store itself
Buildings
amount owed as a result of the purchase of goods and services on credit.
Example: The amount owed by a company for inventory that was purchased on credit and has not been paid for yet.
Accounts Payable
amount owed to government resulting from the application of tax laws.
Example: corporate income tax owed but not yet paid.
Income Tax Payable
amount owed relating to the purchase of property.
Example: The loan associated with the purchase of a home or building.
Mortgage Payable
amount owed in services or products (not money) to a customer who paid in advance.
Example: A publisher who owes a customer who bought a 12-month magazine subscription.
Unearned Revenue
the amount given by shareholders to obtain shares of stock from a company.
Example: A company sells shares of stock to the public. The amount the company receives
Capital Stock
earnings that are retained in the business.
Example: If a company reports net income for the year of $100,000 and reinvest the entire amount in the business (doesn’t distribute dividends to its owners), the retained earnings is $100,000.
Retained Earnings
2 Formats of Balance Sheet
Classified Balance Sheet
Comparative Balance Sheet
a BS in which assets and liabilities are sub-divided into current and non-current categories
Classified Balance Sheet
