Learning is Fun Company - Statement of Financial Position Vocabulary

Vocabulay flashcards covering key terms for the Statement of Financial Position including assets, liabilities, and owner's equity as defined in the Learning is Fun Company notes.

Assets

Resources owned or controlled by the company that have economic value and are expected to provide future benefits.

Current Assets

Assets expected to be converted into cash, sold, or consumed within one year.

Cash

Money in the form of currency, coins, and bank deposits readily available for use.

Accounts Receivable

Amounts owed to the company by customers for goods or services sold on credit.

Allowance for Doubtful Accounts

A contra-asset account that estimates the portion of Accounts Receivable that is expected to be uncollectible.

Accrued Income

Revenue that has been earned but not yet received in cash (also known as Accrued Revenue).

Inventory

Goods held for sale in the ordinary course of business.

Prepaid Expenses

Payments made in advance for goods or services to be received in the future.

Total Current Assets

The sum of all current assets.

Noncurrent Assets

Assets expected to provide benefits for more than one year.

Long Term Investments

Investments intended to be held for more than one year.

Intangible Assets

Non-physical assets such as patents, trademarks, and goodwill.

Property, Plant and Equipment (PPE)

Tangible long-term assets used in operations, such as buildings and machinery.

Accumulated Depreciation

The total depreciation allocated to Property, Plant and Equipment (PPE) over time; it is a contra-asset.

Total Noncurrent Assets

The sum of all noncurrent assets.

Total Assets

A calculation represented by $\text{Current Assets} + \text{Noncurrent Assets}$.

Current Liabilities

Obligations due within one year.

Accounts Payable

Amounts owed to suppliers for goods or services purchased on credit.

Accrued Expenses

Expenses incurred but not yet paid.

Unearned Income

Cash received in advance for goods or services not yet delivered (also known as Deferred Revenue).

Notes Payable

Written promises to pay a certain amount on a short-term basis.

Total Current Liabilities

The sum of all current liabilities.

Noncurrent Liabilities

Obligations due after more than one year.

Mortgage Payable

A long-term loan secured by real estate.

Loans Payable

Long-term borrowings from lenders.

Total Noncurrent Liabilities

The sum of all noncurrent liabilities.

Total Liabilities

A calculation represented by $\text{Current Liabilities} + \text{Noncurrent Liabilities}$.

Owner’s Equity

The owner’s residual interest in the assets after deducting liabilities; also called Capital.

Accounting Equation

$$\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$$