Segment 2.1 Financial Statements

This flashcard set covers essential vocabulary terms and definitions related to financial statements, as outlined in the lecture notes.

Balance Sheet

Reports a company’s financial position at a point in time, detailing assets, liabilities, and equity.

Assets

Economic resources of a company that have probable future value.

Liabilities

Economic obligations of a company that represent probable future obligations.

Shareholders Equity

Total assets minus total liabilities; represents residual interest in the company.

Current Assets

Assets expected to provide probable future value within the next 12 months, listed in decreasing order of liquidity.

Long-term Assets

Assets expected to provide economic benefits for more than one year.

Historical Cost

Asset measurement method based on the original transaction value.

Net Realizable Value

The net amount of cash that an asset could be converted into in the ordinary course of business.

Current Liabilities

Obligations expected to be satisfied within one year or the operating cycle, whichever is longer.

Long-term Liabilities

Liabilities expected to be satisfied in more than one year.

Stockholders' Equity

The residual interest in the assets of the entity after deducting liabilities.

Income Statement

Reports a company's profit or loss during a specific period, measuring activity over time.

Discontinued Operations

Profits from business components that are sold or disposed, reported separately below continuing operations.

Statement of Cash Flows

Provides information about cash receipts and disbursements, helpful in assessing future profitability and liquidity.

Cash Basis Accounting

Measurement of cash receipts and payments from transactions related to providing goods and services.

Accrual Basis Accounting

Measurement of revenues and expenses regardless of the timing of cash receipts or payments.