Accounting Principles: Classified Balance Sheet

This set of flashcards highlights key vocabulary and concepts related to creating and understanding a classified balance sheet in accounting.

Equity

The value of an ownership interest in property, including shareholders' equity in a business.

Accounting Equation

Assets = Liabilities + Equity.

Classified Balance Sheet

A financial statement that organizes assets and liabilities into current and non-current categories.

Current Assets

Assets that are expected to be converted into cash or used up within one year.

Long-Term Assets

Assets that are expected to provide economic benefits for more than one year.

Current Liabilities

Obligations that a company expects to settle within one year.

Long-Term Liabilities

Obligations that are due for payment in more than one year.

Total Assets

The total value of everything owned by a business, including current and long-term assets.

Total Liabilities

The total amount of debts and obligations that a business owes to outside parties.

Owner's Capital

The total amount of an owner's contributions to the business, plus any retained earnings.

Financial Ratios

Quantitative measures used to assess a company's financial performance.

Net Income

The total revenue minus total expenses, representing the profit of a business.

Prepaid Insurance

An asset that represents insurance premiums paid in advance.

Accumulated Depreciation

The total depreciation expense that has been recorded against a long-term asset.

Accounts Receivable

Money owed to a company by its customers for goods or services delivered.

Unearned Revenue

Money received by a company for services not yet rendered, recorded as a liability.

Trial Balance

A report that lists the balances of all general ledger accounts to ensure total debits equal total credits.

Restricted Cash

Cash that is not available for immediate use due to legal or contractual obligations.

Salaries Payable

Liabilities representing wages owed to employees.