Balance Sheet Fundamentals: Assets, Liabilities, and Equity

Vocabulary flashcards covering core balance sheet concepts and the accounting equation based on the provided notes.

Assets

Resources owned by a business expected to provide future economic benefits; reported on the balance sheet.

Liabilities

Obligations of a business arising from past events that will require future sacrifices of economic benefits.

Equity

Owner's claim on the assets after liabilities are deducted; includes contributed capital and retained earnings.

Balance Sheet

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

Accounting Equation

Assets = Liabilities + Equity; the fundamental relationship in accounting.

Liabilities + Equity = Assets

Alternative expression of the accounting equation showing that external and owner claims fund assets.