Financial Statements
A financial statement that reports a company’s assets, liabilities, and owner’s equity at a specific point in time.
Balance Sheet
Current Assets − Current Liabilities;
Working Capital
The length of time an asset is expected to be productive.
Useful Life
Inventory is recorded as a ___________ on the balance sheet.
current asset
The difference between the highest and lowest values.
Range
A statement that shows a company’s revenues, expenses, and net income or net loss over a period of time.
Income Statement
Current Assets ÷ Current Liabilities
Current Ratio
Long Term Asset that is not depreciable
Land
An inventory method where the oldest costs are assigned to COGS and the newest costs remain in ending inventory.
FIFO (First-In, First-Out)
Payroll taxes for Social Security and Medicare.
FICA Tax
Occurs when total expenses exceed total revenue.
Net Loss
shows how much of the company is financed by debt.
Debt Ratio
The estimated value of an asset at the end of its useful life.
Salvage Value
Average Inventory/ Cost of Goods Sold
Inventory Turnover Ratio
The middle value when numbers are arranged in order.
Median
Resources owned by a business that have economic value
Assets
A company’s ability to meet short-term obligations.
Liquidity
An accelerated depreciation method that expenses a larger amount in the early years of an asset’s life.
Double Declining Balance
An inventory method where the newest costs are assigned to COGS and the oldest costs remain in ending inventory.
LIFO (Last-In, First-Out)
A bank fee for account maintenance or transactions.
Service Charge
Claims to assets once liabilities are deducted
Equity
A measurement of how effectively a business generates profit relative to sales, assets, or equity.
Profitability
The formula for straight-line depreciation
Total Asset cost minus salvage value divided by useful life
The value of goods still on hand at the end of the accounting period after all sales and adjustments.
Ending Inventory
Revenue minus cost of goods sold.
Gross Profit