chapter 2 Flashcards
What is the left side?
debit
What is the right side?
credit
What goes on the classified balance sheet?
assets, current assets, liabilities, current liabilites, stockholders equity
Current assets
a company’s short term investments that are expected to be used or converted to cash within one year.
examples of current assets
accounts recievable, cash, inventory, supplies, prepaid expenses.
How are current assets listed?
in the order they expect to convert them to cash.
Intangible assets definition
assets that do not have physical substance
current liabilities definition
Obligations the company is to pay within the next year
examples of current liabilities
accounts payable, salaries and wages payable, notes payable, interest payable
whats the difference between a non current asset and a current.
The length of time used. Current assets are short time and non current assets are long term.
Where does COGS go on the income statement?
under expenses
current ratio equation
current assets/current liabilities
earnings per share equation
net income-preffered dividends/weighted-average common shares outstanding
Accounts payable
owed to suppliers for goods or services bought on credit
notes payable
owed to lenders as per terms of a promissory note