FLC: Accounting Flashcards
Fundamental accounting equation
assets = liabilities + owners equity
cost of goods sold
revenue - gross income
expense equation
gross income - net income
accounts payable
credited when goods or services are purchased on credit terms
what is depreciation
reduction in value of asset over time
how to get in the green?
decrease expenses and increase income
common monthly household variable expense
utilities
income statemetn
how well business has been doing over a period of time
balance sheet
fin statement that summarizes assets, liabilities, and shareholders equity at a specific point in time
Residual value
amount that an asset is worth at the end of a lease
balance sheet
fin statement that best demonstrates that a business has enough funds to meet current obligations
What effect does a low inventory turnover have on a co
negative, inventory that moves slowly costs money, as co must pay holding cost, and the inventory may become obsolete
what is an income statemetn used for
determine amoutn of profit and loss
what is the length of a fiscal period
no regulations. most co’s are quareterly or annually
current asset
item that will be used up/converted to cash during the fiscal year
