unit 5: personal/business finance

assets give example

item of value- car

accounts receivable/AR

someone owing you money

liability

debt

accounts payable/AP

you owing someone else money

creditors

the people you owe money to

equity

amount of money a person/business has

what is the balance sheet equation

assets=liabilities+ owners equity

A=L+OE

who are the four people who use the balance sheet

owners

creditors

investors

government

why are the assets(left side) listed in a certain order on the balance sheet

goes from easiest things to convert to cash to hardest

what does capital mean?

how much money you have

what was the name of the person with capital next to it on the balance sheet?

K. Dubhord

what is always listed first on the liabilities side of the balance sheet?

A/P

profit

how much money you get after taking out all the expenses

revenue

amount that business earns after a sale

expenses +example

what the business has to spend money on in order for the business to run- wages

what is the more formal word for profit?

net income

what is net loss

when expenses are more than profit

how are you supposed to represent net loss?

with a bracket around the number