Balance sheet in depth Flashcards
Example of Assets
- Cash (cash on hand);
- Investments (stocks, bonds, etc.);
- Accounts receivable (trade accounts receivable);
- Inventories;
- Prepaid expenses;
- Fixed assets (land, building, rolling stock, office furniture, etc.);
- Intangible assets (patents, copyrights, trademarks, etc
What is allowance for doubtful account, where does it go
Current asset
This is an estimate of the amount of receivables (accounts receivable) that will probably not be collected.
What is pre-paid expense and where does it go
Current asset
It is an asset that represents the amount of services to be received
The company has paid for services without having received them or has received them only partially.
Other receivables
Current asset
Loans receivable (notes receivable);
Taxes receivable;
Interest receivable;
Dividends receivable;
Rent receivable.
All of the Non-Current assets
- Non current investments
stock, bond - Fixed assets
Tangible, Intangible - Goodwill
It is the difference between the price paid by the company to acquire all or part of another company and the value of the identifiable items acquired.
Assets-Liabilities
Method of depreciation
1) Straight line method
Acquisition cost- residual value/ Useful life
Residual value= Estimated amount that the company would obtain from the disposal of its asset at the end of its life
2) Declining balance method at a constant rate
Net book value X constant declining rate
3) method of production units
What are the current liabilities
Bank overdraft;
Accounts payables;
Accrued expenses; fees to be paid
Current portion of Long-term loan.
Interest payable
Income tax payable
deffered revenue
provision for risk and expense
What are the non-current liabilities
- Loan
- Mortgage Loan
- Long term Rent
Equity
Share capital
Retained earnings= RE at the beginning of the year + earnings - dividends
Net income = Revenues - Expense
How to calculate cost of sales
open inventory+ purchases- closing inventory
