C213 Ch 3 - Balance Sheet

common stock

includes voting rights. Dividend paid after the other stock. Higher potential for capital gains and risk

preferred stock

True owners of the business. Has priority for dividends and assets during liquidation. Dividends are often fixed and paid before other stock. Stock is less volatile and considered lower risk due to its stability. 

asset mix

proportion of the total assets in each asset category, is determined to a large degree by the industry in which the company operates

transaction analysis

process of determining how an economic event impact financial statements

Financing mix

result of management decisions

entity concept

the idea that personal financial activity is kept separate from business financial activity

historical cost convention

accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition

going concern assumption

allows the readers of financial statements to assume that the company will continue on long enough to carry out its objectives and commitments