Balance Sheet Flashcards
What is a balance sheet?
It’s a financial statement that provides a snapshot of one point in time
It is a list of assets and the claims upon those assets.
What are the two types of claims on assets
- Owners claims
2. Non-owners claims (Liabilities)
What is the balance sheet formula?
Assets-Liabilities = Owners Equity
When might an accountant not record a transaction
A transaction or event only affects the accounting statements if the event was performed and something changed in the period we are accounting for.
EX: internal intangible assets are not included
What is the standard layout of a balance sheet in the US
In US balance sheet assets are listed in decreasing order of liquidity
What is the standard layout of a balance sheet in Europe
In Europe balance sheet assets are listed in increasing order of liquidity
Define Inventory
stock, things to sell to customers
Define PP&E
Property Plant and Equipment - Assets we are not swelling to customers and are used to carry out business, usually fixed assets
Define Paid In Capital (PIC)@ Excess of PAR
additional paid-in capital
Define “On open account”
Means we haven’t paid cash yet but we will pay it in the future
Define Current Liabilities
Paid in the next 12 months
Define Current Assets
Will be turned into cash in less than 12months
Define Paid In Capital @PAR
the legal amount one must pay for the shares
Define common stock figure
any par value collected (shares issued and outstanding x par value)
Define General non-current assets
Will not be turned into cash in less than 12months - more long term
