Balance Sheet Overview

These flashcards cover the key concepts and definitions related to balance sheets, including assets, liabilities, owner's equity, and other relevant financial terminology.

Balance Sheet

A financial statement that documents a firm's assets, liabilities, and owner's equity at a specific point in time.

Assets

Economic resources owned by a firm to operate, such as cash, inventory, and property.

Liabilities

Claims on a firm's assets by outside entities, representing what the firm owes.

Owner's Equity

The claims on a firm's assets by the owners or shareholders, representing their residual interest.

Current Assets

Assets that can be converted to cash or used within the current operating period, typically within one year.

Long-term Liabilities

Obligations not due within one year, including loans and mortgages.

Current Liabilities

Obligations due within the current operating period, such as accounts payable and notes payable.

Contributed Capital

Resources provided by the owners to the business, often through direct investment.

Retained Earnings

Undistributed profits generated by a company that are reinvested in the business.

Accounting Equation

Assets = Liabilities + Owner's Equity; a fundamental equation representing the relationship between these three components.

Intangible Assets

Assets with no physical substance, including patents, trademarks, and reputations.