Chapter 4 Flashcards
Name the 4 financial statements:
Income statement
Balance Sheet
Cash Flow
Retained Earnings
Balance Sheet Accounts
Assets
Liabilities
Owner’s Capital
Statement of Owner’s Equity
Capitol less Withdrawals
Income Statement Accounts
Revenues
Expenses
Classified Balance Sheet
A balance sheet that shows current assets separate from long-term assets, and current liabilities separate from long-term liabilities.
liquidity
the ease at which an asset can be converted into cash
Current asset
cash and other assets that are expected to be converted to cash or used up within a year.
long term asset
an asset a company plans to have for over a year. (land, plant, equipment, intangible assets)
operating cycle
Time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash.
Long-Term Investment
Investments in bonds (debt securities) or stocks (equity securities) in which the company intends to hold the investment for longer than one year.
property, plant, and equipment
long term tangible assets
Intangible Assets
An asset with no physical form, a special right to current and expected future benefits.
copyrights, trademarks, patents
Current Liability
A liability that must be paid with Cash or with goods and services within one year, or within the entity’s operating cycle if the cycle is longer than a year
Long- Term Liability
A Liability that does not need to paid within one year or within the entity’s operating cycle, whichever is longer.
Closing Process
A step in the accounting cycle that occurs at the end of the period. The closing process consists of Journalizing and posting the closing entries to set the balances of the revenues, expenses, income summary, and dividends accounts to zero for the next period.
