Chapter 4 Flashcards
Assets
Financial, physical, and intangible items owned by the business.
Generally accepted accounting principles (GAAP)
Guidelines that set out the manner in form of presenting accounting information.
Accrual accounting
The practice of recording economic activity when it is recognized rather than waiting until it is realized.
Balance sheet
Financial statement that provides a snapshot of a businesses financial position as of a specific date.
Liquidity
How quickly and asset can be converted into cash.
Current assets
Cash and other assets that are expected to be converted into cash less than one year.
Cash
The amount of coin, currency, and checking account balances.
Marketable securities
Short term, high-quality, high liquid investments, that typically pay interest.
Receivables
Credit sales made to customers.
Inventories
Raw materials, work process, and finish products that the venture hopes to sell.
Fixed assets
Assets with expected lives of greater than one year.
Depreciation
Production and value of a fixed asset over its expected life, intended to reflect the usage or wearing out of the asset.
Accumulated depreciation
The sum of all previous depreciation amounts charge to fix assets.
Other long-term assets
Intellectual property rides or intangible assets that can be patented or owned.
Payables
Short term liabilities, go to suppliers for purchases made on credit.
Accrued wages
Liabilities owed to employees were previously completed work.