Term
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Definition
| tates what your business owns (assets) and owes (liabilities) on a specific date. Also shows the amount owned – assets less liabilities |
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Term
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Definition
| Shows how much the business earned during a period of time. This is what you have earned from providing goods and services less what it costs you to provide goods and services |
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Definition
| Shows the earnings of the business that go to the shareholders (Some companie’s present a “statement of retained earnings” showing earnings and dividends paid only) |
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Definition
| Shows the source of cash and what the cash was used for during a period of time |
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Term
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Definition
the amount of cumulative profits and losses kept by the company since the first day of operations.
Retained earnings changes with net income (profits and losses) and dividends paid to shareholders (owners)
Beginning Retained Earnings
+ Net Income or - Net Loss
- Dividends Paid
= Ending Retained Earnings |
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Term
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Definition
| directly related earnings from day to day business operations |
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Term
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Definition
| directly related to buying and selling assets used long term in the business |
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Definition
| directly related to borrowing and repaying debt and receipts and payments from/to owners |
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Term
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Definition
Assets = Liabilities + Stockholder’s Equity
Have = Owe + Own (Includes net profits)
Revenues
- Expenses =
Net profit or loss |
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Term
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Definition
Amounts customers owe the company for goods or services
provided; normally collected in 30 to 90 days |
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Term
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Definition
| Items held only for sale to the customer |
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Term
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Definition
| Paid in advance before the service is provided; gives future benefit (rent, insurance) |
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Term
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Definition
| Items that are used up in day to day operations |
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Term
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Definition
| Amounts owed to the company; normally interest is charged and the note is repaid in longer than 3 months |
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Term
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Definition
| The company takes their excess cash and invests it in stocks or bonds to earn a return. Investments can be short term or long term |
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Term
| Property/Plant/Equipment (PP&E) |
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Definition
| Assets used long-term to generate revenues; they have physical substance (Buildings, Equipment, Autos, Land, Computers) |
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Term
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Definition
| The total amount for all prior years (cumulative) of depreciation expense for all prior periods. This is a contra account subtracted from plant, and equipment |
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Term
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Definition
| No physical substance - used long-term to generate revenues The company has the exclusive right to do something;Includes trademarks, copyrights, patents, franchises, goodwill |
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Term
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Definition
Amounts owed to suppliers, normally paid in 30-60 days
Suppliers are those who provide inventory or goods and
services over and over again |
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Term
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Definition
| Both of these are expenses that have not yet been paid |
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Term
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Definition
that the company owes – examples are: employee taxes,
legal, advertising, bonuses, retirement plans |
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Term
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Definition
| Expenses incurred that have not yet been paid (Salaries, Rent, Interest, Taxes) If an amount is large enough, it gets its own line. If it is not large enough it will be included in accrued expenses. |
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Term
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Definition
Cash received from customers before the good or service is
provided. The company owes the customer a good/service |
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Term
| Current Maturities of Long Term Debt |
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Definition
| The portion of long –term debt that will be repaid within 1 year |
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Term
| Notes Payable and Long Term Debt |
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Definition
Amounts owed to banks and other financing companies
that will be paid later than one year from now Amounts due within a year are reported as current maturities of long term debt |
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Term
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Definition
| Amounts borrowed from investors; normally long-term |
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Term
| Common Stock or Contributed Capital |
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Definition
| Funds received from investors in exchange for ownership – common stock is reported at par value |
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Term
| Additional Paid in Capital |
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Definition
| Amounts over and above par raised from investors from the sale of stock (ownership) |
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Term
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Definition
Total of all (cumulative) profits and losses less dividends
paid to owners |
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Term
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Definition
| The company buys and holds its own stock |
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Term
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Definition
| the time it takes a company to spend cash to do business and get the cash back again (buy inventory, pay expenses, sell to the customer and collect from the customer). Usually less than one year. |
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Term
| How is the Balance Sheet Organized? |
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Definition
| The balance sheet is listed in the order of liquidity – how soon it will impact cash |
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