Finiancal Statement flash cards

Cash

Balance Sheet → Current Asset

Accounts Receivable

Balance Sheet → Current Asset

Prepaid Rent

Balance Sheet → Current Asset

Prepaid Insurance

Balance Sheet → Current Asset

Inventory

Balance Sheet → Current Asset

Land

Balance Sheet → Noncurrent Asset

Buildings

Balance Sheet → Noncurrent Asset

Equipment

Balance Sheet → Noncurrent Asset

Patents

Balance Sheet → Noncurrent Asset

Goodwill

Balance Sheet → Noncurrent Asset

Accumulated Depreciation

Balance Sheet → Listed under Long-Term Assets

Accumulated Amortization

Balance Sheet → Listed under Long-Term Assets

Accounts Payable

Balance Sheet → Current Liability

Rent Payable

Balance Sheet → Current Liability

Salaries Payable

Balance Sheet → Current Liability

Accrued Expenses

Balance Sheet → Current Liability

Interest Payable

Balance Sheet → Current Liability

Utilities Payable

Balance Sheet → Current Liability

Short-Term Note Payable

Balance Sheet → Current Liability

Note Payable

Balance Sheet → Noncurrent Liability

Loan Payable

Balance Sheet → Noncurrent Liability

Bonds Payable

Balance Sheet → Noncurrent Liability

Retained Earnings

Balance Sheet → Stockholders' Equity

Common Stock

Balance Sheet → Stockholders' Equity

Sales Revenue

Income Statement → First line on the Income Statement

Interest Revenue

Income Statement → After Operating Income

Rent Revenue

Income Statement → Usually after Operating Income in the Other section

Cost of Goods Sold (COGS)

Income Statement → After Sales; used to calculate Gross Profit

Bank Charges

Income Statement → Operating Expense

Charitable Contributions

Income Statement → Operating Expense

Commissions

Income Statement → Operating Expense

Depreciation Expense

Income Statement → Operating Expense

Rent Expense

Income Statement → Operating Expense

Insurance Expense

Income Statement → Operating Expense

Utilities Expense

Income Statement → Operating Expense

Dues & Subscriptions

Income Statement → Operating Expense

Interest Expense

Income Statement → After Operating Income in the Other section

Legal & Professional Fees

Income Statement → Operating Expense

Accounting Fees

Income Statement → Operating Expense

Meals and Entertainment

Income Statement → Operating Expense

General and Administrative Expense

Income Statement → Operating Expense

Phone Expense

Income Statement → Operating Expense

Office Expense

Income Statement → Operating Expense

Income Tax Expense

Income Statement → After Operating Income in the Other section

Payroll Expenses

Income Statement → Operating Expense

Salaries Expense

Income Statement → Operating Expense

Amortization Expense

Income Statement → Operating Expense

Other Expenses

Income Statement → Operating Expense

Cash Flows from Operating Activities

Statement of Cash Flows → Operating Section

Cash Flows from Investing Activities

Statement of Cash Flows → Investing Section

Cash Flows from Financing Activities

Statement of Cash Flows → Financing Section

Five main Current Assets on this sheet

Cash, Accounts Receivable, Prepaid Rent, Prepaid Insurance, and Inventory

Five main Noncurrent Assets on this sheet

Land, Buildings, Equipment, Patents, and Goodwill

Seven Current Liabilities on this sheet

Accounts Payable, Rent Payable, Salaries Payable, Accrued Expenses, Interest Payable, Utilities Payable, and Short-Term Note Payable

Three Noncurrent Liabilities on this sheet

Note Payable, Loan Payable, and Bonds Payable

Two Stockholders' Equity accounts on this sheet

Retained Earnings and Common Stock

Identification rule: Payable accounts

Usually means the company owes money → Liability

Identification rule: Expense accounts

Most accounts ending in Expense go on the Income Statement

Identification rule: Revenue accounts

Revenue goes on the Income Statement

Identification rule: Prepaid accounts

Prepaid means the company paid before using it → Current Asset

Accounts Receivable vs. Accounts Payable

Receivable = money owed TO us (Asset); Payable = money WE owe (Liability)

Prepaid Rent vs. Rent Expense

Prepaid Rent = Balance Sheet Current Asset; Rent Expense = Income Statement Operating Expense

Prepaid Insurance vs. Insurance Expense

Prepaid Insurance = Balance Sheet Current Asset; Insurance Expense = Income Statement Operating Expense

Salaries Payable vs. Salaries Expense

Salaries Payable = Balance Sheet Current Liability; Salaries Expense = Income Statement Operating Expense

Interest Payable vs. Interest Expense

Interest Payable = Balance Sheet Current Liability; Interest Expense = Income Statement Other section after Operating Income

Accumulated Depreciation vs. Depreciation Expense

Accumulated Depreciation = Balance Sheet under Long-Term Assets; Depreciation Expense = Income Statement Operating Expense

Accumulated Amortization vs. Amortization Expense

Accumulated Amortization = Balance Sheet under Long-Term Assets; Amortization Expense = Income Statement Operating Expense

First line on the Income Statement

Sales Revenue

Line item after Sales used to calculate Gross Profit

Cost of Goods Sold (COGS)

Gross Profit calculation

$$\text{Gross Profit} = \text{Sales Revenue} - \text{COGS}$$

Location of normal Operating Expenses

Income Statement after Gross Profit

Location of Interest Revenue

After Operating Income

Location of Interest Expense

After Operating Income in the Other section

Location of Rent Revenue

Usually after Operating Income in the Other section

Location of Income Tax Expense

After Operating Income in the Other section

Current vs. Noncurrent timeframe

Current = generally within one year; Noncurrent = longer-term

Asset vs. Expense distinction

Asset provides a future benefit and goes on the Balance Sheet; Expense represents something used up and goes on the Income Statement

Liability vs. Expense distinction

Liability = something the company owes and goes on the Balance Sheet; Expense = a cost incurred and goes on the Income Statement

Three main Balance Sheet categories

Assets, Liabilities, and Stockholders' Equity

Four main Income Statement categories

Revenue, Cost of Goods Sold, Expenses, and Other Revenue/Expenses

Three main Statement of Cash Flows categories

Operating, Investing, and Financing

Strategy for classifying an unknown account

First ask: Owned = Asset; Owed = Liability; Owner value = Equity; Earned = Revenue; Used up = Expense