Financial Accounting Accounts

Accounts recievable

• Current Asset

• money owned by a business from customers who have used the company’s goods/services

Retained earnings

• Stockholder’s Equity

• profit company has set aside for reinvesting in the business (instead of distributing it as dividends)

Accrued expenses payable

• Current liability

• Expenses that a company has not yet received an invoice for (estimating on the cost)

Prepaid expenses

• Current Asset (because they hold future economic benefit for your compnay)

• Paying in advance for goods/services that a company will use in a future accounting period

Common stock

• Stockholder’s Equity (Credit)

• Ownership of a company that investors have purchased

Stockholder’s equity/Liability decrease

Debit

Stockholder’s equity/Liability increase

Credit

Long-term investments

• Noncurrent asset

• Assets that companies plan to keep for more than 1 year/accounting cycle for generating income

Assets

• company plans to turn into cash within 1 year/accounting cycle

• resource with economic value

• business currently owns or control

• benefits can be measured (measured by the “historical cost principle”)

Historical Cost Principle

• assets are recorded cost of the day of attendance they were obtained at despite any changing value