Account Summary - Balance Sheet and Income Statement (Lecture Notes)

Vocabulary flashcards covering balance sheet categories, assets, liabilities, equity, revenues, and expenses as listed in the notes.

Balance Sheet

A financial statement that presents assets, liabilities, and equity at a specific date.

Assets

Economic resources owned by a business expected to provide future benefits.

Liabilities

Obligations owed to outside parties; debts of the company.

Equity

The residual interest in the assets after deducting liabilities; owner’s claims, including contributed capital and retained earnings.

Cash

Money on hand and in the bank; the most liquid asset.

Accounts Receivable

Amounts customers owe the company from credit sales.

Inventory

Goods held for sale in the ordinary course of business.

Supplies

Consumable items used in operations; typically expensed as used.

Equipment

Tangible long-term assets used in operations (machinery, tools).

Land

Real property held by the business; a long-term asset.

Accounts Payable

Amounts owed to suppliers for purchases on credit.

Wages Payable

Accrued wages owed to employees.

Notes Payable

Written promises to pay a loan; may be short- or long-term.

Taxes Payable

Taxes owed to government authorities; current liabilities.

Unearned Revenue

Cash received before goods/services are provided; liability.

Common Stock

Capital contributed by shareholders; a component of equity.

Retained Earnings

Accumulated net income kept in the business; not distributed as dividends.

Dividends

Distributions of earnings to shareholders; reduce retained earnings.

Sales

Revenue from selling goods; a primary source of revenue.

Service Revenue

Revenue from providing services to customers.

Rental Revenue

Revenue from leasing or renting assets.

Consulting Revenue

Revenue from consulting services provided.

Revenue

General term for income earned from normal business activities.

Rent Expense

Cost of using property or equipment under a lease.

Salaries Expense

Cost of employee salaries and wages for the period.

Utilities Expense

Cost of utilities such as electricity, water, and gas.

Insurance Expense

Cost of insurance coverage for the period.

Miscellaneous Expense

Small or irregular expenses not categorized elsewhere.