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?
- Assets, liabilities, and equity.
- Define assets in accounting.
- Resources owned by a company that have economic value and are expected to benefit future operations.
- Define liabilities in accounting.
- Obligations or debts that a company owes to other entities.
- Define equity in accounting.
- The residual claim on assets after liabilities are paid; also called owners' equity or net worth.
- State the accounting equation.
- Assets = Liabilities + Equity.
- Name three examples of current assets.
- Cash, accounts receivable, and inventory.
- Name three examples of non-current assets.
- Property, plant and equipment; intangible assets; and long-term investments.
- Define current liabilities.
- Obligations expected to be paid within one year.
- Name three examples of current liabilities.
- Accounts payable, short-term debt, and accrued expenses.
- What is the difference between current and non-current liabilities?
- 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?
- Revenues, expenses, and net income.
- Define revenue.
- Income earned from the sale of goods or services in the normal course of business.
- Define expenses.
- Costs incurred to generate revenue or operate the business.
- What is gross profit?
- Revenue minus cost of goods sold.
- What is operating income?
- Gross profit minus operating expenses.