CH. 7 Flashcards
The general ledger is comprised of these two financial statements..
1) The balance sheet
2) The income statement
Who is in charge of managing the general ledger?
The Company’s CFO
The balance sheet is comprised of these three sections
1) Assets
2) Liabilities
3) Owners equity
Assets =
Liabilities + Owners equity
Owners Equity =
Assets - Liabilities
Why is owners equity shown as a liability on the balance sheet?
Because the company essentially owes that money to the owners.
What are assets?
Represents what a GC has. This is a positive entry on the balance sheet.
What is a liability
Represents what a GC owes. This is a negative entry on the balance sheet.
Owners equity is
net worth or stockholders equity.
What is an income statement
The sum of all the business that a company did for a period of time (Usually fiscal year). It combines revenue and cost and is known as the profit and loss statement. It helps to illustrate the current value of a business.
Income statement equation
Revenue = cost + profit Profit = revenue - cost
What are liquidity ratios?
These ratios provide short-term analysis and indicates the company’s abilities to pay bills.
What are profitability ratios
These ratios reflect longer-term analysis. (ROE/ROI/ROA/EPS/ROR)
What are weekly labor reports?
A subset of job cost history that only focuses on direct and indirect labor. Because labor is so risky, it is posted weekly by the HO to the field so jobsite management can make adjustments to the field cont control system.
What is a balance sheet?
The balance sheet shows the company’s assets, liabilities and shareholder equity. Investors need all of this information to determine the current value of the company.