Introduction To Financial Accounting Flashcards
(9 cards)
1
Q
What is an asset?
A
Anything a company OWNS that provides future economic BENEFIT
2
Q
What are examples of assets?
A
- Cash,
- accounts receivable (money you’re owed),
- inventory (stock a company intends to sell),
- PPE (Property, Plant, Equipment)
3
Q
What are liabilities?
A
Something a company OWES that causes future economic SACRIFICE
4
Q
What are examples of liabilities?
A
- accounts payable (money a company owes)
- loans payable (loans you’re obliged to repay)
- notes payable (general term for payables)
5
Q
What is shareholder’s equity?
A
Shareholder’s equity = assets - liabilities
The shareholder’s ‘piece of the pie’
What goes into the shareholder’s pocket when liabilities are deducted from assets
6
Q
What are examples of shareholder’s equity?
A
- Common shares (a share in the company)
- Retained earnings (profits held for future use)
7
Q
What is revenue?
A
Money earned from a company’s sales
8
Q
What are expenses?
A
Costs involved with a company
9
Q
What are dividends?
A
Shares of profit
