Financial Statements Vocabulary

Flashcards on Financial Accounting

Balance Sheet

Measures a company's financial position at a specific point in time.

Income Statement

Measures a company's financial performance over a period of time.

Statement of Cash Flows

Shows how a company's activities impact cash flows over a period of time.

Assets

All of the company's resources.

Cash

Actual currency.

Inventory

Goods bought or manufactured for resale.

Land

Physical property.

Equipment/Buildings

Physical equipment and structures.

Intangible Assets

Non-physical assets like patents and copyrights.

Liabilities

Claims of external parties (creditors) against a company's assets; represents debts and other amounts owed.

Shareholders' Equity

Claims of insiders (shareholders) on the company.

Current Assets

Assets with a duration of less than one year.

Short-Term Investments (Marketable Securities)

Investments in stocks or treasury securities intended to be sold within one year.

Accounts Receivable

Money owed to the company, generally due within a year.

Prepaid Expenses

Services prepaid by the company that will be used within a year.

Non-Current Assets

Assets converted to cash or consumed beyond the current year.

Property, Plant, and Equipment (PP&E)

Assets with a lifespan typically between 5 and 30 years.

Current Liabilities

Liabilities due within one year.

Accounts Payable

Money the company owes to others, due within a year.

Accrued Liabilities

Various other payables besides accounts payable, like rent payable or salaries payable.

Unearned Revenue

Payment received in advance for a service to be provided in the future.

Non-Current Liabilities

Liabilities with a duration greater than one year.

Paid-In Capital

Cash received from issuing stock, including common and preferred stock accounts.

Additional Paid-In Capital (APIC)

Amounts paid in addition to the par value of stock.

Retained Earnings

Cumulative earnings the company has accumulated since its founding.

Revenues

Increases in resources from a company's operations, resulting from the sales of goods and services.

Expenses

Decreases in a company's resources resulting from its operations and providing its services.

Cost of Goods Sold (COGS)

The cost of goods that a company has sold during the accounting period.

Net Income

The result of subtracting total expenses from total revenues.