Balance Sheet Flashcards
(32 cards)
Balance Sheet
A statement of the assets, liabilities, equity, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.
Current assets
Something that the company expects to turn into cash within the next 12 months.
Cash and cash equivalents
The line item that reports the value of a company’s assets that are cash or can be converted into cash immediately.
Accounts reveivables
Money owed to a company by its debtors.
Inventory
Sometimes referred to as stock. This is a complete list of items a company might have on hand
Other current assets
This line is a category of things of value that a company owns, benefits from, or uses to generate income that can be converted into cash within one business cycle.
Prepaid expenses
Future expenses that are paid in advance. On the balance sheet, this is first recorded as an asset. As the benefits of the assets are realized over time, the amount is then recorded as an expense. You’ll find this listed at the very bottom of the current assets because its the “thickest” and most difficult to turn back into cash.
Non-current assets
These are assets that will not turn into cash within the next twelve months.
Non-current investments
This line is sometimes referred to as Long-Term Investments. A company might have bonds and debt securities that might be available for sale or help to maturity.
Property, plant, and equipment
It refers to a company’s physical or tangible long-term assets that typically have a life of more than one year. This include buildings, machinery, land, office equipment, furniture, and vehicles.
Patents, trademarks and other intangibles
An asset that is not physical in nature.
Goodwill
An intangible asset associated with the purchase of one company by another.
Total non-current assets
Adding up all the assets that are expected to be turned into cash, but not within the next twelve months.
Total assets
This is a summation of both the current assets and the non-current assets. In essence, this represents everything that is expected to be turned into cash at some point in time, either short term or long term.
Current liabilities
These are the obligations that need to be paid within the next twelve months.
Accounts payable
When a company purchases goods on credit which needs to be paid back within the next twelve months.
Notes payable
This line is sometimes referred to as current borrowing or current financial debt. This line represents how much of the outstanding short-term debts should be paid back to the issuer.
Accrued expenses
This is an expense that has no invoice or other documentation, like, salaries, electricity bills, or basically any payment that is consumed but not yet paid.
Taxes payable
A liability reported in the current liabilities section of a company’s balance sheet that indicates the amount that an organization expects to pay in income taxes within 12 months.
Non-current liabilities
This is anything that the company expects to pay outside the 12-month timeframe.
Long-term debt
Debt that matures in more than one year.
Deferred tax
The amount of income tax payable in future periods in respect of taxable temporary differences. So, in simple terms, this is tax that is payable in the future.
Provisions
Funds set aside by a business to cover specific anticipated future expenses or other financial impacts. An example of this is the estimated loss in value of inventory due to obsolescence.
Total non-current liabilities
Adding up all the obligations that have to be paid in cash, but not within the next twelve months.
