Balance Sheet, Income Statement and Stockholders' Equity Flashcards
What is the accounting equation?
assets = liabilities + equity
The accounting equation is the foundation for what financial statement?
balance sheet
How do you calculate net income?
revenue - expenses = net income
The net income equation is the foundation for what financial statement?
income statement
What are the two main umbrella categories for statement of stockholders’ equity?
contributed capital and retained earnings
What are the three types of cash flows included on the statement of cash flows?
operating cash flow, investing cash flow and financing cash flow (IN THAT ORDER!)
Which statement(s) is/are taken over a period of time?
cash flows, income statement and stockholders’ equity
Which statement(s) is/are taken at a point in time?
the balance sheet
cash goes in the __________ category
asset
accounts receivable goes in the __________ category
asset
inventories goes in the __________ category
asset
land goes in the __________ category
asset
equipment goes in the __________ category
asset
investments goes in the __________ category
asset
accounts payable goes in the __________ category
liabilities
salaries payable goes in the __________ category
liabilities
taxes payable goes in the __________ category
liabilities
unearned / deferred revenue goes in the __________ category
liabilities
notes payable goes in the __________ category
liabilities
long-term debt goes in the __________ category
liabilities
when something is paid for “on account,” it goes in the __________ category
liabilities
common stock goes in the __________ category
equity
retained earnings goes in the __________ category
equity
when something is a debit, it goes on the ________ side of the T-chart
left
when something is a credit, it goes on the ________ side of the T-chart
right
What is the order for things on an income statement?
revenue, COGS, gross profit, expenses, net income
How do you calculate retained earnings?
retained earnings = (beginning retained earnings) + (net income) - (dividends)
When it comes to the specific type of equity, common stock falls under ___________ ____________
contributed capital
When it comes to the specific type of equity, additional paid-in capital falls under ___________ ____________
contributed capital
When it comes to the specific type of equity, treasury stock falls under ___________ ____________
contributed capital
Retained earnings is the same thing as __________ capital
earned
Is cash a current or noncurrent asset?
current
Are marketable securities a current or noncurrent asset?
current
Are accounts receivable a current or noncurrent asset?
current
Is inventory a current or noncurrent asset?
current
Are investments a current or noncurrent asset?
noncurrent
Is PPE (property, plant and equipment) a current or noncurrent asset?
noncurrent
Liabilities are listed in order of __________.
maturity
Assets are listed in order of __________.
liquidity (how easily they are converted into cash)
Are accounts payable a current or noncurrent liability?
current
Are accrued liabilities a current or noncurrent liability?
current
Are short-term borrowings a current or noncurrent liability?
current
Is deferred (or unearned) revenue a current or noncurrent liability?
current
If a liability is current, then it is due __________.
within one year
If a liability is noncurrent, then it is due ____________.
in 1+ years
Is long-term debt a current or noncurrent liability?
noncurrent
Liabilities are purchased “on ___________” or “on ____________”.
on account or on credit
What is the set of standards and accepted practices for accounting in the United States called?
the GAAP (Generally Accepted Accounting Principles)
marketable securities go in the ______ category
asset
prepaid expenses go in the _______ category
asset
accounts receivable goes in the _________ category
asset
common stock, addtl. paid-in capital, and treasury stock are all this type of equity: ______________________
contributed capital
accumulated depreciation is a _________ ___________
contra asset
What is the difference between accumulated depreciation and depreciation expense?
Accumulated depreciation is the total accumulated depreciation since the beginning, and depreciation expense is just within that one period of measurement.
