Intro financial accounting concepts covering the balance sheet, income statement, and cash flow statement.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What are the three main components of a balance sheet?
Show answer
Assets, liabilities, and equity.- Define assets in accounting.
Show answer
Resources owned by a company that have economic value and are expected to benefit future operations.- Define liabilities in accounting.
Show answer
Obligations or debts that a company owes to other entities.- Define equity in accounting.
Show answer
The residual claim on assets after liabilities are paid; also called owners' equity or net worth.- State the accounting equation.
Show answer
Assets = Liabilities + Equity.- Name three examples of current assets.
Show answer
Cash, accounts receivable, and inventory.- Name three examples of non-current assets.
Show answer
Property, plant and equipment; intangible assets; and long-term investments.- Define current liabilities.
Show answer
Obligations expected to be paid within one year.- Name three examples of current liabilities.
Show answer
Accounts payable, short-term debt, and accrued expenses.- What is the difference between current and non-current liabilities?
Show answer
Current liabilities are due within one year; non-current liabilities are due beyond one year.- What are the three main sections of an income statement?
Show answer
Revenues, expenses, and net income.- Define revenue.
Show answer
Income earned from the sale of goods or services in the normal course of business.- Define expenses.
Show answer
Costs incurred to generate revenue or operate the business.- What is gross profit?
Show answer
Revenue minus cost of goods sold.- What is operating income?
Show answer
Gross profit minus operating expenses.
FlashKeepers