National Airways, Inc. - Financial Statements Vocabulary Review

Vocabulary flashcards derived from the December 31 financial statements notes (balance sheet and retained earnings).

Assets

Economic resources owned by the company expected to provide future benefits (e.g., Cash, Accounts Receivable, Supplies, Equipment).

Cash

A current asset consisting of money on hand or in bank used to fund operations.

Accounts Receivable

Amounts owed to the company by customers for goods or services delivered but not yet collected.

Supplies

Items used in operations that are consumed or used up; recorded as a current asset until used.

Equipment

Long-term tangible assets used in operations (property, plant, and equipment).

Liabilities

Obligations the company must settle in the future (e.g., Accounts Payable, Notes Payable).

Accounts Payable

Amounts owed to suppliers for goods or services received; a current liability.

Notes Payable

Written promissory notes indicating a debt; a form of liability to lenders.

Common Stock

Equity representing ownership shares issued to stockholders.

Retained Earnings

Cumulative net income minus distributions (dividends); part of stockholders’ equity.

Dividends

Distributions of earnings to shareholders; reduce retained earnings.

Net Income

Revenues minus expenses for the period; increases retained earnings.

Ticket Revenues

Revenue earned from selling airline tickets; a type of operating revenue.

Aircraft Fuel Expense

Expense for fuel used by aircraft; part of operating costs.

Balance Sheet

Financial statement showing assets, liabilities, and stockholders’ equity at a specific date.

Statement of Retained Earnings

Financial statement detailing beginning retained earnings, add: net income, subtract: dividends, ending retained earnings.