Structure of a Balance Sheet
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48 Terms
What a company owns or controls.
Assets
Assets expected to be used/converted within a year
Current Assets
Cash
Current Asset
Accounts Recievable
Current Asset
Inventory
Current Asset
Prepaid Expenses
Current Asset
Short-Term Investment
Current Assets
Property
Long-term asset
Plant
Long-term asset
Equipments
Long-term asset
Patents
Long-term assets
Goodwill
Long-term assets
Intangible Assets
Long-term assets
Long-term investments
Long-term assets
Total Assets =
Current assets + Long-term assets
What a company owes
Liabilities
Liabilities due within a year
Current liabilities
Accounts Payable
Current Liabilities
Salaries Payable
Current Liabilities
Interest Payable
Current Liabilities
Unearned Revenue
Current Liabilities
Short-term Notes Payable
Current Liabilities
Bonds Payable
Long-term Liabilities
Mortgage Payable
Long-term Liabilities
Long-term Notes Payable
Long-term Liabilities
The owner’s claim after liabilities are paid.
Equity
Common Stock
Equity
The value of shares that a company has issued to its owners (shareholders)— it represents ownership in the company. When investors buy stock, this is what’s recorded.
Common Stock
Additional Paid-In Captial
Equity
The extra amount investors paid above par value for the stock.
Additional Paid-In Capital
Retained Earning
Equity
Treasury Stock
Equity
Shares that the company previously issued but then bought back from shareholders. They reduce total equity because the company is essentially “un-owning” part of itself.
Treasury Stock
Assets = $120,000
Liabilities = $80,000
Equity =
$40,000
Assets = ?
Liabilities = $60,000
Equity = $25,000
85,000
Ex: Earned $2,000 by providing services for cash.
What accounts are affected?
Cash and service revenue
Ex: Earned $2,000 by providing services for cash.
How are each accounts are affected?
Cash is debited and service revenue is credited
Ex: You buy equipment for $5,000 cash.
What accounts are affected?
Cash and Equipment
Ex: You buy equipment for $5,000 cash.
How are each accounts are affected?
Cash is credited; Equipment is debited
Ex: Paid $400 for monthly utilities.
What accounts are affected?
Cash and Utilities Expense
Ex: Paid $400 for monthly utilities.
How are each accounts affected?
Cash is credited; utilities expense is debited
Ex: Took out a $10,000 loan.
What accounts are affected?
Cash and Notes payable
Ex: Took out a $10,000 loan.
How are each accounts affected?
Cash is debited; Notes payable is credited
Ex: Declared and paid $1,000 dividend to stockholders.
What accounts are affected?
Cash and Dividends
Ex: Declared and paid $1,000 dividend to stockholders.
How are each accounts affected?
Dividend is debited; Cash is credited
Ex: Employees earned $3,000 in salaries this month, but you’ll pay them next month.
What accounts are affected?
Cash and salaries payable
Ex: Employees earned $3,000 in salaries this month, but you’ll pay them next month.
How are each accounts affected?
Cash is credited; Salaries payable is debited
Equipment cost $40,000, accumulated depreciation $25,000. Sold for $18,000.
What’s the journal entry?
$40,000 - $25,000 = $15,000; sold for $18,000 = Gained $3,000.