Financial Statements Vocabulary (AgEc 2310)

Vocabulary terms and definitions related to financial statements, accounting methods, and reporting standards as presented in the AgEc 2310 lesson notes.

CA

Current Asset

NCA

Non Current Asset

CL

Current Liabilities

LTD

Long Term Debt

OE

Owners Equity

OD

Owners Draw

CI

Current Income (equity)

R

Revenue

E

Expenses

BSA

Balance Sheet Accrual

BSC

Balance sheet Cash

IA

Income Statement Accrual

IC

Income Statement Cash

Book value

Purchase price less accumulated depreciation, calculated as $\text{Book value} = \text{Purchase price} - \text{Accumulated depreciation}$.

Accounts Payable

What is owed to vendors.

Accounts receivable

The balance or amount that other people owe you or the business.

Cash basis accounting system

An accounting system where revenue is recognized when you receive the money for the item being sold, and expenses are recognized when they are actually paid for.

Accrual basis accounting system

An accounting system where revenue is recognized when the product has been produced and is ready for sale whether it is sold or not, and expenses are recognized when they are incurred whether they have been paid for or not.

Net income (on Balance Sheet)

A line item in the equity section of the Balance sheet that should match the Net income or Loss on the Income statement, linking the two reports together.

Basic Accounting Equation

$$\text{Assets (A)} = \text{Liabilities (L)} + \text{Equity (E)}$$