Understanding Assets, Liabilities & Equity Flashcards
What are the 6 types of accounts?
Assets
Liabilities
Shareholders’ equity
Revenue
Expenses
Dividends
What is a current asset?
An asset that’s expected to be liquidated within one year
(Inventory, cash)
What is a long term asset?
An asset that isn’t expected to be liquidated within one year
(PPE, stocks, long term investments)
What type of account are long term investments?
Long term assets
What type of account are accounts receivable?
Current asset
What type of account is consulting revenue?
Revenue
(money generated from sale of goods/services)
What type of account is a computer?
Long term asset
What type of account is mortgage payable?
Long term liability
What is a long term liability?
A debt obligation that doesn’t need to be settled within one year
What is a current liability?
A debt obligation that needs to be settled within one year
What type of account is salaries payable?
Current liability
What type of account is cash?
Current asset
What type of account is supplies expense?
Expenses
What type of account is retained earnings?
Shareholders’ Equity
What type of account is temporary investments?
Current asset
What type of account is accounts payable?
Current liability
What type of account is income tax expense?
Expenses
What type of account is a car
Long term asset
What type of account is salaries & utilities expense?
Expenses
What type of account is land?
Long term asset
What type of account is inventory?
Current asset
What type of account is a building?
Long term asset
What type of account is loans payable?
Most often long-term liability but can be a current liability
What type of account is common shares?
Shareholders’ equity
What type of account is supplies?
Current asset
What’s the difference between supplies and supplies expense?
Supplies expense = cost involved with purchasing supplies (expense)
Supplies = the ownership of supplies (asset)
