Balance Sheet Overview

This set of flashcards covers key vocabulary related to balance sheets, including definitions of assets, liabilities, equity, and other concepts essential for understanding financial statements.

Assets

Resources owned by a company that have economic value.

Liabilities

Obligations or debts that a company needs to settle in the future.

Equity

The ownership interest in a company, represented by the residual claims on assets after liabilities are deducted.

Current Assets

Assets that are expected to be converted to cash or consumed within one year.

Non-Current Assets

Long-term investments that are not expected to be converted into cash within one year.

Current Liabilities

Obligations that a company expects to settle within one year.

Non-Current Liabilities

Long-term obligations that are not due within the next year.

Balance Sheet Equation

The equation that states Assets = Liabilities + Equity.

Liquidity

The ability of a company to meet its short-term obligations.

Financial Position

A snapshot of a company's financial condition at a specific point in time.