Line Items

Question 1

Cash

Answer 1

(Asset) - Self-explanatory, just like cash you have sitting in the bank

Question 2

Short-Term Investments

Answer 2

(Asset) - Almost as liquid as cash, but not exactly. This includes things like money market accounts, CDs, etc.

Question 3

Inventory

Answer 3

(Asset) - Items that have already been produced, but haven’t yet been sold

Question 4

Accounts Receivable

Answer 4

(Asset) - The company has sold items but hasn’t yet been paid for them. It’s been recorded on the income statement but is like an IOU from the customer

Question 5

Prepaid Expense

Answer 5

(Asset) - The company has paid for expenses in cash, but hasn’t yet recognized them as cash on the Income Statement

Question 6

PP&E

Answer 6

(Asset) - Any factories, warehouses, offices, land that has long term (greater than one year) value and contributes to the Company’s core business

Question 7

Intangible Assets

Answer 7

This includes things like trademarks, patents and other intellectual property

Question 8

Goodwill

Answer 8

(Asset) - When a company acquires another company and pays a premium over the book value of the shareholders’ equity

Question 9

Long-Term Investments

Answer 9

(Asset) - These are investments that are longer term and less liquid than short term investments but aren’t PP&E

Question 10

Revolver

Answer 10

(Liability) - This is a line of credit. A company can borrow and then pay off the debt at any time. Think of it as a credit card for companies

Question 11

Accounts Payable

Answer 11

(Liability) - The company has received items, but hasn’t yet paid for them

Question 12

Deferred Revenue

Answer 12

(Liability) - The company has collected cash from customers for services that will be delivered over time (think a subscription you pay up front for an entire year)

Question 13

Accrued Expenses

Answer 13

(Liability) - These expenses are recorded on the income statement but hasn’t yet paid them in cash. These are typically recurring expenses like rent, salaries

Question 14

Deferred Tax Liability

Answer 14

(Liability) - The company has paid less cash taxes than it actually owes and will have to make it up by paying additional taxes to the government in the future

Question 15

Long-Term Debt

Answer 15

(Liability) - This is an amount of debt that matures in more than a year

Question 16

Common Stock and Additional Paid In Capital

Answer 16

(Equity) - This is the market value of the shares of stock when they were issued by the company, not the market value at the current time

Question 17

Treasury Stock

Answer 17

(Equity) - This is the total value of shares that the company has repurchased from investors, at the value for which they were repurchased, not their current value

Question 18

Retained Earnings

Answer 18

(Equity) - This is the company’s cumulative net income minus any dividends that have been paid to equity investors