Exam (elaborations)
Longitudinal 3 - Unit 4 (Exam 2)
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Longitudinal 3 - Unit 4 (Exam 2)
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Longitudinal 3 - Unit 4 (Exam 2)Financial reports
financial accounting standards board (FASB)
internal revenue service
periods of time
balance sheet and income statement
balance sheet
statement of financial position, or net worth, of a business at a specific
point in time (e.g., 10/01/2000)
snapshot
a summary of
-the assets of the business
-who owns them (liabilities and equities)
income statement
across a time period (e.g., 10/01/2000 - 9/30/2001)
story
summarizes revenues, expenses, and net income/net profit or loss of a
business across a specific accounting period or range of time
direct look at profitability (bottom line): the ability to produce sufficient
sales (revenues) to cover expenses, pay the current liabilities, and
produce an acceptable return on investment
also called
-statement of profit and loss (P & L), or revenues, and expenses
-statement of operations
, -statement of earnings
fiscal year
accounting period
the basic accounting equation
Assets = Liabilities + Owner's Equity
OR
Owners' equity = Assets - Liabilities
what is owners' equity also called
net worth
balance sheet components (in order)
assets
-current assets, fixed assets, other assets
liabilities
-current and accrued liabilities
-long term liabilities
owners' equity (net worth or capital)
assets
economic resources used to yield future benefits
listed in decreasing order of liquidity (how quickly things can be
converted to cash - most liquid of assets)
current (liquid) assets
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