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Debits & Credits
Debits:
Increase Assets
Decrease Liabilities
Decrease Stockholder Equity
Decrease Revenue
Increase Expenses

Credit:
Decrease Assets
Increase Liabilities
Increase Stockholder Equity
Increase Revenue
Decrease Expenses
Income Statement
Provides a look at financial performance over a period of time
Sales or Operating Revenues
Always at the top of the income statement.  Incrase in assets or settlement of liabilities from selling goods or providing services
Cost of Goods Sold or Cost of Sales
First expense listed. Labor, material, and overhead costs related to providing goods or services during period
Gross Profit
Sales or Operating Revenue - Represents the profit that is available to cover all of the other expenses on income statement
Cash
Current Asset: Cash on hand or deposits in banks
Marketable securities
investments that can be sold quickly for cash - short term investments
Inventory
goods in the process of being manufactured or available for sale to customers
Accounts receivable
amounts due from customers for goods and services ALREADY delivered
Prepaid expenses
asset recognized when cash pain in advance of when future expenses will be incurred - i.e. pay rent up front but expense is incurred in the future
Long-term investments
investments expected to be held for the long term
Property, Plant, and Equipment
buildings, land, and equipment used in operations minus accumulated depreciation
Intagible Assets
Items like patents or copyrights that provide future benefit but do not have physical substance
Goodwill
purchase price of an acquired company minus the market value of the identifiable assets minus the liabilities of that company - purchasing company over market value based on potential
Accounts payable
amount owed to suppliers for inventory purchased on credit
Other payables or accrued expenses
amounts owed for expenses like interest, taxes, salaries, and rent that have already occured
Unearned Revenue or Advances from Customers
when company receives full payment up front on services that will be delivered in the future
Current maturities of long-term debt
portion of long-term debt to be paid within the year
Long term debt (notes, loans bonds, or mortgage payable)
Amount of obligations to be paid more than 1 year later
Common stock at par
Par value of stock issued for common stock aggregated over the life of the firm.
Additional paid in capital
amount of cash firm received above par value when the stock was issued aggregated over the life of the firm
Preferred stock
Amount of cash the firm received for stock giving the holder a preference relative to common share holders in terms of dividends and assets received if the firm is liquidated
Treasury stock
cost of stock repurchased by the firm and held internally - reduces stockholders' equity because it reduces the equity claimed by outside shareholders
retained earnings
cumulative net income minus dividends over the life of the firm
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