The Balance Sheet Flashcards
Balance sheet
Statement of Financial Position
Statement of a firm’s financial position on a particular date
Closing the books
Transferring net revenue and expense account balances to retained earnings for the period
Calendar Year
A 12-month accounting period that begins on January 1 and ends on December 31
Fiscal year
Any 12 consecutive months used as an accounting period
Current Assets
Cash and items that can be turned into cash within one year
Fixed assets
Assets retained for long-term use, such as land, buildings, machinery, and equipment
(Property, plant, and equipment)
Current Liabilities
Obligations that must be met within a year
Long-term liabilities
Obligations that fall due more than a year from the date of the balance sheet
Accounts Payable
Money company owes its suppliers and vendors
Accrued expenses
Expenses that have been incurred but for which bills have not yet been received or payed
Retained earnings
The portion of shareholders’ equity earned by the company but not distributed to its owners in the form on dividends
Owner’s Equity
All the equity that has been accumulated by the company since it was formed
Depreciation
An accounting procedure for systematically spreading the cost of a tangible asset over its estimated useful life
