Partial Balance Sheet Flashcards

Study Notes

Assets

Defined as resources owned by a company that provide future economic benefits.
Categories of assets include:
- Current Assets
- Long-Term Investments
- Property, Plant, and Equipment (PP&E)
- Intangible Assets

Current Assets

Include liquid assets that can be converted into cash within a year.
Components consist of:
- Cash and cash equivalents
- Short-term investments
- Accounts receivable (money owed by customers)
- Notes receivable (written promises for payment)
- Inventory (goods available for sale)
- Supplies (materials used in operations)
- Prepaid expenses (payments made in advance for services)

Long-Term Investments

Investments intended to be held for more than one year.
Common types include:
- Stocks
- Real estate
- Long-term bonds

Property, Plant, and Equipment (PP&E)

Represents tangible fixed assets used in operations.
Components include:
- Land
- Office equipment
Subject to depreciation, which reduces the asset's book value over time.

Intangible Assets

Non-physical assets that provide value and competitive advantage.
Key examples include:
- Patents (exclusive rights to inventions)
- Goodwill (value derived from a brand’s reputation)
- Trademarks (brand identifiers)

Liabilities and Stockholders' Equity

Represents the obligations of a company and the owners' residual interest.
Main components are:
- Current Liabilities
- Long-Term Liabilities
- Stockholders’ Equity

Current Liabilities

Short-term obligations expected to be settled within a year.
Include:
- Notes payable (promissory notes due)
- Accounts payable (amounts owed to suppliers)
- Salaries payable (wages owed to employees)
- Unearned revenue (payments received before services are provided)
- Interest payable (interest expense that has accrued)

Long-Term Liabilities

Obligations that extend beyond one year.
Common examples include:
- Mortgage payable (loan secured by real estate)
- Notes payable (long-term debt obligations)

Stockholders' Equity

Represents the owner's claim after liabilities are settled.
Includes:
- Common equity (investment made by shareholders)
- Retained earnings (cumulative profits retained for reinvestment)

Description

Test your knowledge on balance sheet components with these flashcards. This quiz covers crucial accounting terms such as assets, current assets, long-term investments, and more. Perfect for students looking to reinforce their understanding of financial statements.