The Balance Sheet - Chapter 2 Flashcards
The Balance Sheet
Financial Position
The status of the business based on its assets, liabilities, and owner’s equity
How to determine Financial Position
List assets, list debts, calculate the difference
Assets
Things that you own that have dollar values
Liabilities
Your debts
Equity
Difference between total assets and total liabilities
Other terms used for Equity
Owner’s Equity, Capital, Net Worth
What is the Fundamental Accounting Equation
Assets (A) - Liabilities (L) = Owners Equity (OE)
Balance Sheet
A statement showing the financial position of a person, business, or other organization
Heading of a Balance Sheet
Who? - Name of the individual, business or organization
What? - Name of the financial statement
When? - Date the financial position is determined
Order of Assets
Order of liquidity
Order of Liabilities
Order they are generally paid
How to write final totals
One on each side, the same line with a double underline
Accounts Receivable
Anyone who owes money to the business also called a Debtor
Accounts Payable
Anyone to whom the business owes money also called a Creditor
Abbreviations
Do not use abbreviations unless a business name includes an abbreviation
Use of Ruled Lines
In a column is being totaled (added or subtracted), a single line is placed beneath, Final totals are double underlined
Neatness
It is very important that work is neat and perfectly legible
Who’s claims first?
Creditors claims are settled first
CICA
Canadian Institute of Chartered Accountants
Canadian GAAP
Canadian Generally Accepted Accounting Principles
AcSB
Accounting Standards Board
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
ASPE
Accounting Standards for Private Enterprises
