Assets
What is a Fixed Asset? and Give an Example
AKA Long Term Asset- converted into cash longer than 1 year
What is a liability?
Something that you owe.
What is stockholder's equity?
The value of your business
What is the accounting equation?
Assets = Liabilities + Owners Equity
What does liquid mean and what account is the most liquid?
Liquid: the ability of a company to turn assets into cash
Cash
Give 5 examples of assets.
answers vary
Give an example of a Long Term Liability
Varying answers
What are two categories of Stockholder's Equity?
Capital Stock
Retained Earnings
What are balance sheets used for?
To gain insight of a company's financial standing at a specific point in time.
What is the least liquid Current Asset?
Inventory
What are plant assets? Like Equipment in your Factory
Assets that are used for more than a year.
What is a current liability?
A liability that lasts for less than a year
Retained Earnings can be found on another Financial statement. How is this amount calculated? (Net Income)
$ made after paying all expenses.
Why is it called a balance sheet?
What are the three parts of a balance sheet heading?
Company Name
Balance Sheet
Date
What are current assets?
Assets that are used for less than a year.
What are the two key words to know that a transaction involves a liability?
Payable, Debt
What are Retained Earnings?
The profits that a company has earned invested back into the business.
Which of the following is not a current asset?
Prepaid insurance, Land, Supplies, Accounts Receivable
Land
How do Investors ans analysts use a Balance Sheet to evaluate a company?
Liquidity
liabilities vs assets
compare finances over time
Definition of Assets
Goods and Resources that the company OWNS
The assets and liabilities of an organization are whose responsibility?
It depends on how the organization was established-e.g. Sole Proprietor, Corporation
What is Owners Equity?
Initial investment from owners, stocks sold and retained earnings.
What does PPE stand for? (these are Fixed/long term Assets)
Property Plant and Equipment
What does the Balance Sheet show to owners and stakeholders?
The financial health and stability of their company