Financial Statements: Balance Sheet Liabilities and Equity

Flashcards covering key vocabulary related to Balance Sheet liabilities and stockholders' equity.

Liabilities

Obligations that require a future sacrifice, usually in the form of a cash payment.

Accounts Payable

A liability resulting from the credit purchase of merchandise (retailer) or raw materials (manufacturer).

Notes Payable

A liability representing borrowed funds, such as bank borrowings.

Accrued Amounts

Liabilities that result from a timing difference between when an unpaid expense is reported on the income statement and when it is ultimately paid (e.g., accrued wages, income taxes).

Unearned Revenue

A liability representing advanced payments received from customers for goods or services to be delivered in the future.

Contingent Liabilities

Liabilities recorded when it is more likely than not that a future occurrence will result in a material adverse financial impact and the amount can be reasonably estimated.

Current Liabilities

Liabilities that are scheduled to be paid within one year.

Long-Term Debt

Liabilities that are not scheduled to be paid within one year (e.g., mortgages, bonds).

Stockholders' Equity

The residual amount of assets remaining after subtracting liabilities, representing the owners' claim to the assets.

Contributed/Invested Capital

The portion of stockholders' equity primarily represented by Common Stock, reflecting owner investments.

Retained Earnings

The accumulated net income of a corporation that has not been distributed to stockholders as dividends.

Treasury Stock

Shares of a company's own stock that it has reacquired from the open market.