accounting chapter 1

short-term investment

plan on selling in less than a year

accounts receivable

the amount that our costumers owe us for providing goods and services with no interest

notes receivable

when the company lends out money to someone else or formalized agreement to lend money with specific terms with interest

inventory

what they have on hand that they sell to their costumers

supplies

need them for the business operations but do not sell them

prepaid expenses

something paid for in advance that has a future economic benefitl

long-term investment

assets held for over one yearthat are not intended for sale in the normal course of business.

equipment

anything that holds revenue that will last greater than a year

buildings

similar to equipment

intangibles

non physical assets that provide value, like a patent

accounts payable

what we owe to our venders and suppliers

accrued expenses

costs that have been incurred but not yet paid, like interest or wages

notes payable

if company borrowed money from another company

taxes payable

taxes owed to the government that have not yet been payed

unearned revenue

when someone pays in advance for goods and services that haven’t been provided yet

bonds payable

Money a company borrows by issuing bonds

common stock

shares representing ownership in a company, often providing voting rights and dividends

retained earnings

net income that the company has generated from day one that they haven’t paid in dividends

revenues

sales of products or services to costumers

expenses

costs of selling products or services

profit

net income

sales revenue

providing goods and services

fee revenue

Money earned by charging customers for providing a service

interest revenue

Money earned from interest on loans, investments, or money

rent revenue

Money earned by allowing someone to use property or equipment in exchange for rent

cost of goods sold

cost of inventory

wages expense

paying employees

rent expense

renting buildings

interest expense

money owed on interest

dividends

distribution of profit to stockholders

income statement

reports the company’s revenues and expenses over an interval of time

balance sheet

presents the financial position of the company at a point in time

stockholders’ equity

changes in stockholders equity over an interval of time