Chapter 4 Flashcards
Balance sheet that places each asset and liability into a specific category
Classified Balance Sheet
Measure of how quickly an item can be converted to cash
Liquidity
Asset that is expected to be cash, sold, or used during the next 12 months
Current Asset
Time span where cash is paid for goods and services and then sold to customers for the business to collect cash
Operating Cycle
Asset that will not be converted to cash or used within the business’ operating cycle
Long-Term Asset
Long-term asset category that includes investments in bonds or stocks that the company plans to hold for more than one year
Long-Term Investment
Long-lived, tangible asset used in the operation of a business
Plant Asset
Asset with no physical form that is valuable because of the special rights it carries
Intangible Asset
Liability that must be paid with cash or goods within one year
Current Liability
Liability that does not need to be paid within one year
Long-Term Liability
Zeroing out revenues, expenses, income summary, and dividends at the end of a period
Closing Process
Account that relates to a particular period and is closed at the end of that period
Temporary Account
Account that is not closed at the end of the period
Permanent Account
Transfers revenue, expense, and dividend balances to retained earnings
Closing Entries
Temporary account where revenues and expenses are moved to before being transferred to retained earnings
Income Summary
