The Balance Sheet

These flashcards cover key vocabulary terms and concepts related to the balance sheet and fundamental accounting principles.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time.

Assets

Items that the company has invested in that are expected to provide significant future economic benefits.

Liabilities

Obligations that a company has to sacrifice benefits in the future.

Stockholders’ Equity

The residual interest in the assets of the entity after deducting liabilities.

Accounting Cycle

A systematic accounting process used to capture and report the financial effects of a company’s transactions.

T-accounts

Accounts summarized in ledger accounts that display debits and credits for each account.

Debit/Credit Framework

A system of recording transactions where debits and credits are used to maintain the accounting equation.

Trial Balance

A report that verifies that debits equal credits in the accounting records.

Current Assets

Assets expected to be used up or converted into cash within twelve months.

Current Liabilities

Obligations that are due to be paid or fulfilled within twelve months.