Balance Sheet (Flashcards)

This section of a sole proprietor’s balance sheet reports the difference in the amount of a company’s assets and liabilities. During an accounting year it reports the owner’s capital account and the owner’s drawing account.

These are a company’s resources which have future economic value that can be measured and expressed in the company’s currency.

This element of the balance sheet reports a company’s obligations including deferred revenues and customer deposits.

This section of the balance sheet reports the company’s cash plus resources which are usually expected to turn to cash within one year of the balance sheet date (or within its operating cycle if it is longer than one year).

These resources are not expected to turn to cash within one year of the balance sheet date (or within its operating cycle if it is longer).

These resources were purchased by a company but have no physical substance. Some examples include goodwill, patents, trademarks, and customer lists.

These costs were paid in advance and have not yet expired. They are usually reported as current assets until they expire.

This section of the balance sheet reports obligations that are due within one year of the balance sheet date (unless the company’s operating cycle is longer).

Generally, these obligations are not due within one year of the balance sheet (or within the operating cycle if it is longer than one year).

The amounts reported on the balance sheet are as of the final __________ of the accounting period.

This noncurrent section of the balance sheet reports the assets that are used in a business (buildings, equipment, etc.) and the related accumulated depreciation.

This accounting principle requires that transactions be recorded at their cash value at the time of the transaction. It also prevents increasing the amount when the market value of land and buildings increase.

These are required by the full disclosure principle and are considered to be an integral part of the financial statements.

This subsection of stockholders’ equity reports the amounts that investors had paid to the corporation for newly issued shares of the company’s stock.

Generally, this section within stockholders’ equity reports the cumulative earnings of a corporation minus the cumulative dividends that have been declared.

This separate line within stockholders’ equity reports the corporation’s cumulative income that had been excluded from previous income statements. Examples include the results from currency translation, hedging, pensions, etc.

These company assets are restricted because a lender has a lien on them until the company’s loan is satisfied.

This lease considers the rental agreement to be a purchase and financing arrangement. As a result, the company leasing the asset must report both the asset and the related liability.

This results in some of a company’s interest on its debt being added to the cost of a self-constructed building instead of being expensed.

This current asset category includes a company’s currency, coins, undeposited checks, checking account balances, and very liquid investments that had a maturity of less than three months when originally purchased.

This type of cash balance usually results from writing checks without sufficient funds available. As a result this amount should be reported as a current liability.

This is defined as the amount of current assets minus the amount of current liabilities.

This refers to asset accounts that are expected to have credit balances. Examples include Allowance for Doubtful Accounts and Accumulated Depreciation.

This is defined as a plant asset’s cost minus its accumulated depreciation.

This is equal to the total amount of stockholders’ equity. However, the amount does not indicate the market value of the corporation.

This contra stockholders’ equity account usually reports the cost of a corporation’s own stock that has been repurchased from stockholders and has not been retired.

This noncurrent asset section of the balance sheet is reported immediately after the current assets. Included are the common stock of another corporation and the cash surrender value of life insurance owned by the corporation.

This is the time needed for a company’s cash to turn into inventory and return to cash. A period of several months is common. (In the few industries where this is longer than a year, it will be used to determine whether an asset or liability is “current” or “noncurrent”.)