Financial Accounting 101 - Unit 1

Assets

A company's resources that are expected to provide a future benefit to the company.

Examples of Assets

Cash Accounts Receivable Merchandise Inventory Prepaid Expenses - Insurance, Advertising, Rent Supplies	Property, plant, and equipment (PPE) - Land, Building, Equipment,  Intangibles - Patents, Copyrights, Trademarks, Franchises, Goodwill

Liabilities

Debts and obligations of a company that it has to settle in the future.

Example of Liabilities

Notes Payable Accounts Payable Accrued Expenses - Salaries Payable, Interest Payable, Income Tax Payable, etc.	Current Portion of Long-Term Notes Payable Deferred Revenue Long-term Notes Payable Bonds Payable

Equity

The net residual value of a company, after all liabilities have been settled.

Example of Equity

• Common Stock

• Retained Earnings

• Dividends

Revenues

Amounts generated by a company in the normal course of business through sales of goods and/or services.

Examples of Revenues

Sales Revenue

Service Revenue

Interest Revenue

Rent Revenue

Expenses

Amounts incurred by a business in the normal course of business in order to generate revenues.

Examples of Expenses

Salaries Expense Rent Expense Utilities Expense Supplies Expense

Cost of Goods Sold Depreciation Expense Interest Expense Income Tax Expens