M1 Flashcards
resources with economic value
assets
debt owed to other party/company
liabilities
total net worth of assets once liabilities settled
owner’s equity
account equation
assets = liabilities + capital
known as balance sheet
statement of final position
permanent accounts/ real accounts
assets/liabilities/owner’s equity
balance remain intact from one period to another
permanent/real accounts
reduction to company’s assets
contra assets
2 example of contra assets
allowance for doubtful account (bad debts)
accumulated depreciation
contra assets to accounts receivable
allowance for doubtful account
(bad debts)
contra asset for property, plant, equipment (except for land)
accumulated depreciation
2 forms of statement of financial position
report form
account form
this statement includes the amounts of the company’s total assets, liabilities, and owner’s equity which totality provides the condition of the company on a specific date
statement of financial position
a form of SFP that shows asset accounts first and then liabilities and owner’s equity accounts after
report form
a form of SFP that shows assets on the left side and liabilities and owner’s equity o the right side just like the debit and credit balances of account
account form
current or non current assets
CASH EUIVALENTS
CURRENT ASSETS
current or non current assets
ACCOUNTS RECEIVABLES
CURRENT ASSETS
current or non current assets
ALLOWANCE FOR BAD DEBTS
CURRENT CONTRA ASSETS
