ACCT 2101: Financial Accounting Understanding the Balance Sheet and Transaction Analysis

Flashcards focused on key vocabulary and concepts related to financial accounting, particularly balance sheets and transaction analysis.

Prepaid Expenses

Expenses that are paid in cash before they are incurred.

Unearned Revenue

Amount received from customers for services not yet delivered or goods not yet provided.

Accrued Liabilities

Liabilities that represent obligations the company has incurred but has not yet paid.

Goodwill

An intangible asset representing the value of a company’s brand, customer relationships, employee relations, and other non-tangible assets.

Transaction Analysis

The process of reviewing the effects of a transaction on the financial statements.

Accounting Equation

The fundamental equation of accounting: Assets = Liabilities + Stockholders’ Equity.

Historical Cost

The original monetary value of an asset.

Fair Value

The estimated worth of an asset based on current market conditions.

Deferred Revenue

Revenue that is collected but not yet earned; recognized as a liability until the services are provided.

Accounts Receivable

Amounts owed to a company by customers for goods or services delivered.

Accounts Payable

Amounts a company owes to suppliers for products and services purchased on credit.

Net Income

The total revenue of a company minus its total expenses.

Retained Earnings

The portion of net income that is retained in the company rather than paid out as dividends.

Deferrals

Accounting entries that delay the recognition of revenue or expenses.