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Financial Accounting > Understanding Assets, Liabilities & Equity > Flashcards

Understanding Assets, Liabilities & Equity Flashcards

1
Q

What are the 6 types of accounts?

A

Assets
Liabilities
Shareholders’ equity
Revenue
Expenses
Dividends

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2
Q

What is a current asset?

A

An asset that’s expected to be liquidated within one year

(Inventory, cash)

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3
Q

What is a long term asset?

A

An asset that isn’t expected to be liquidated within one year

(PPE, stocks, long term investments)

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4
Q

What type of account are long term investments?

A

Long term assets

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5
Q

What type of account are accounts receivable?

A

Current asset

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6
Q

What type of account is consulting revenue?

A

Revenue

(money generated from sale of goods/services)

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7
Q

What type of account is a computer?

A

Long term asset

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8
Q

What type of account is mortgage payable?

A

Long term liability

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9
Q

What is a long term liability?

A

A debt obligation that doesn’t need to be settled within one year

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10
Q

What is a current liability?

A

A debt obligation that needs to be settled within one year

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11
Q

What type of account is salaries payable?

A

Current liability

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12
Q

What type of account is cash?

A

Current asset

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13
Q

What type of account is supplies expense?

A

Expenses

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14
Q

What type of account is retained earnings?

A

Shareholders’ Equity

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15
Q

What type of account is temporary investments?

A

Current asset

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16
Q

What type of account is accounts payable?

A

Current liability

17
Q

What type of account is income tax expense?

A

Expenses

18
Q

What type of account is a car

A

Long term asset

19
Q

What type of account is salaries & utilities expense?

A

Expenses

20
Q

What type of account is land?

A

Long term asset

21
Q

What type of account is inventory?

A

Current asset

22
Q

What type of account is a building?

A

Long term asset

23
Q

What type of account is loans payable?

A

Most often long-term liability but can be a current liability

24
Q

What type of account is common shares?

A

Shareholders’ equity

25
Q

What type of account is supplies?

A

Current asset

26
Q

What’s the difference between supplies and supplies expense?

A

Supplies expense = cost involved with purchasing supplies (expense)

Supplies = the ownership of supplies (asset)

Financial Accounting (25 decks)

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