Chapter 3: The Balance Sheet Flashcards
Long-term assets that are not suitable for reporting under any of the previous classifications
Other Assets
The flip side of accounts receivable
When one company sells on credit, creating for itself an account receivable, the company on the other side of the transaction is buying on credit, creating this
Account Payable
Amounts owned to a business by its credit customers are usually collected in cash within 10 to 60 days
Accounts Receivable
Reflects the wear and tear, or depreciation, of those items since they were originally purchased
Accumulated Depreciation
The grouped together and reported changes which companies experience increases and decreases in equity each year because of the movement of market prices or exchange rates
Accumulated Other Comprehensive Income
Invested by stockholders that exceeds the par value of the issued shares
Additional Paid-In Capital
Probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events
Asset
The proportion of total assets in each asset category, is determined to a large degree by the industry in which the operates
Asset Mix
A listing of an organization’s assets and of its liabilities at a certain time
Balance Sheet
Capital Lease Obligations
A long-term liability in the balance sheet
Coins and currency as well as the balances in company checking and savings account
Cash
Stockholders’ Equity Investment
Common Stock
Cash, accounts receivable, and inventory
Current Assets
Those obligations expected to be paid within one year, the most common being accounts payable
Current Liabilities
Some liabilities, such as mortgages, are payable in equal monthly installments over a specified number of years. The portion of these liabilities that is payable within 12 months from the balance sheet date
Current Portion of Long-Term Debt
The income tax expected to be paid in future years on income that has already been reported in the income statement but, which, because of the tax law, has not yet been taxed
Deferred Income Tax Liability
A financial instrument, such as an option or a future, that derives its value from the movement of a price, an exchange rate, or an interest rate associated with some other item
Derivative
Convey the details in a narrative note without ever including anything in the financial statements themselves
Disclosure
Residual interest in the assets of an entity that remains after deducting its liabilities
Equity
It is an exchange of promises about the future
Executory Contract
The percentage of total financing (liabilities plus equity) in each individual category
Financing Mix
Assets that have no physical or tangible characteristics
Intangible Assets
The name given to goods held for sale in the normal course of business
Inventory
Composed of publicly traded stocks and bonds
Investment Securities
Probable future sacrifice of economic benefit arising from a present obligation of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events
Liability
Long-term notes, bonds, mortgages, and similar obligations on the balance sheet
Long-Term Debt
Those assets that you expect to still be around next year when you prepare the balance sheet again
Long-Term Investments
Arises when a corporation has subsidiaries that are not 100 percent owned by the corporation
Noncontrolling interest
The market value of the shares at issuance
Par Value
Stockholders’ equity investment
Preferred Stock
Payments in advance for business expenses
Prepaid Expenses
Exactly what the label implies: land, buildings, machinery, tools, furniture, fixtures, and vehicles used by a company in conducting its business activities
Property, Plant, and Equipment
Boil down all the estimates and judgments into one number and report that one number in formal statements
Recognition
The cumulative amount of a corporation’s profits that have been reinvested on behalf of the stockholders
Retained Earnings
Formal, interest-bearing loans that are expected to be paid back within one year
Short-Term payable loans
The difference between assets and liabilities in a corporation
Stockholders’ Equity
The process of determining how an economic event impacts the financial statements
Transaction Analysis
The repurchased shares when a company buys back its own shares
Treasury Stock
Represents the company’s obligation to provide service to customers who have paid the company for a service they have not yet received
Unearned Revenue
Once it has been determined that an item should be recognized in financial statements, the question then arises about what dollar amount to assign to the item
Valuation
