Balance Sheet Flashcards
(18 cards)
3 sections of balance sheet
Assets, liabilities and shareholders equity
What are the assets?
Assets are things that the company owns.
2 sections of assets
Current assets & Non current assets
Describe what a current asset is.
Those that are most liquid and can be turned into cash within a year.
What are examples of current assets?
Cash, Marketable securities, accounts receivable, inventory, prepaid expenses
What is the most liquid of all assets?
Cash
Explain what marketable securities are?
Short term investments OR Marketable securities are equity and debt securities for which there is a liquid market OR equity of debt investments that can be easily sold
Examples of marketable securities
Common stock - shares in a company. Bonds - governmetn and corporate bonds
What are accounts receivable?
Payments owed to the company. i.e. if I owned a company accounts receivable would be what someone owes me.
With accounts recievable, is it likely you’ll always get all the money owed to you?
No
What is it called when someone owes you money but it’s unlikely you’ll get it?
Allowance for doubtful accounts
Inventory
Goods available for sale but not sold yet
What is prepaid expenses?
Something that has been prepaid for, i.e. insurance, advertising contracts or rent.
What is a non-current asset?
Something not expected to be turned into cash in a year.
What are examples of non-current assets?
Long term investments, Property, plant and equipment, intangible assets, other assets
What are the 2 types of non-current assets?
Tangible Fixed Assets and Intangible fixed assets
What is tangible fixed assets also know as ?
PP&E (Property, Plant & equipment)
What are examples of PP&E (Property, Plant & equipment)
Land, machinery, equipment, buildings and other durable, generally capital-intensive assets.
