ELEMENTS of Balance Sheet Flashcards
Elements of financial statements
the general groupings of the line items contained within the statements
Financial statements
portray the financial effects of transactions and other events grouping them into broad classes according to their economic characterististics
ASSETS
resources controlled by the enterprise as a result of past transactions and events from which future economic benefits are expected to flow to the enterprise
Current Assets
refers to all assets that are expected to be sold or consumed within the normal operating cycle of the business
Cash
includes money or its equivalent that is readily available for unrestricted use.
Accounts Receivable
these are amounts collectible arising from services rendered to a customer or client on credit or sale of goods to customers on accounts. This constitutes an oral or verbal promise to pay by a customer
Allowance for bad debts
this is a contra-asset account. It provides for possible losses from uncollected accounts.
Notes Receivable
receivables supported by written or formal promise to pay in the form of a promissory note.
Prepaid Expense
account title for expenses that are paid in advance but are not yet incurred or have not yet expired such as Prepaid Rent, Prepaid Insurance, Prepaid Supplies, etc.
Non Current Assets
“tangible assets which are held by an enterprise for use in production or supply of goods and services, for rental to others, or administrative purposes, and which are expected to be used during more than one period” (International Accounting Standards
Land
the site where the building used as office or store is constructed.
Building
a finished construction owned by the business where operations and transactions took place
Equipment
various assets such as machinery, transportation equipment, office equipment, delivery equipment, and store equipment.
Accumulated Depreciation
this is a contra-asset account. This is a Valuation Account which is shown as a deduction from property and equipment.
Intangible Assets
these are identifiable, non-monetary assets without physical substance held for use in production or supply of goods or services.
Liabilities
these are present obligations of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits
Current Liabilities
financial obligations of the enterprise advance which are expected to be settled in the normal operating cycle which is within one (1) year
Accounts Payable
obligations supported by oral or verbal promise to pay
Salaries Payable
salaries earned by employees but not yet paid.
Utilities Payable
utilities already consumed but not yet paid
Unearned Income
cash collected or received in but services have not yet been rendered.
Non-Current Liabilities
these are financial obligations of the enterprise which are expected to be settled for more than a year.
Notes Payable
obligations supported by written or formal promise to pay by the debtor (enterprise) evidenced by a promissory note.
Mortgage Payable
a financial obligation of the enterprise which requires a fixed or tangible property to be pledged as collateral to ensure payment.
