10/9 2.2 Define, Explain, and Provide Examples of Current and Noncurrent Assets, Current and Noncurrent Liabilities, Equity, Revenues, and Expenses

Current Assets

Assets consumed or used within one year or less (e.g., accounts receivable, inventory).

Noncurrent Assets

Assets used over more than one year (e.g., land, buildings, equipment).

Tangible Assets

Assets that have physical substance (e.g., equipment, land).

Intangible Assets

Assets that lack physical substance but carry organizational value (e.g., trademarks).

Current Liabilities

Liabilities that are settled in one year or less (e.g., accounts payable).

Noncurrent Liabilities

Liabilities that are settled in more than one year (e.g., long-term notes payable).

Equity

Represents total organizational value, also known as net worth.

Sole Proprietorship

A type of business owned and run by one individual without distinction between the owner and the business.

Common Stock

Equity securities representing ownership in a corporation.

Dividends

Payments made by a corporation to its shareholder members, typically from profits.

Retained Earnings

The accumulated net income retained in the business rather than paid out as dividends.

Basic Accounting Equation

The fundamental formula of accounting: $\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$.

Non-Equity Transactions

Transactions that involve asset swaps or incurring liability for asset acquisition, which do not affect net equity.