Balance Sheets Flashcards

1
Q

What are 4 examples of assets (asset classes)?

A

Current assets
Long-term investments
Property, plant, and equipment
Intangible assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are some examples of “current assets”?

A

Cash
Accounts receivable
Inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What catagories fall under Stockholders’ Equity?

A

Common stock
Retained Earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What factor gives the balance sheet its name?

A

because the economic resources of a company (assets) must always equal, or be in balance with, the claims against those resources (liabilities and stockholders’ equity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

W

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a balance sheet?

A

report the financial position of a company (its assets, liabilities, and stockholders’ equity) at a specific point in time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are some examples of “long-term liabilities”?

A

Notes payable
Bonds payable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How do you prepare a balance sheet?

A

Header (Name of Company, Type of Statement, Time Period Covered)
Assets in order of liquidity (Should use proper classifications (Current assets, Property, plants, and equipment, and Intangible assets))
Add the assets and double underline
Liabilities in order of when they’re due (Should use proper classifications (Current liabilities, Long-term liabilities, Stockholders’ Equity)
Add the liabilities and double underline

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does the relationship between current assets and current liabilities provide investors?

A

Insight into a company’s liquidity; their ability to pay obligations as they come due

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the underlying formula of the balance sheet?

A

The fundamental accounting equation:
Assets = Liabilities + Stockholders’ Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are some examples of “current liabilities”?

A

Accounts payable
Salaries payable
Unearned revenue (been paid for something not completed)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How do “current assets” differ from other types of assets?

A

Current assets consists of cash and assets that can be expected to turn into cash within 1 year or 1 operation cycle (whichever is longer)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a function of the balance sheet?

A

conveys important information about the structure of assets, liabilities, and stockholders’ equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly