Lesson 1
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12 terms
Terms | Definitions |
|---|---|
 Income Statement | A report of a company's operating performance, in financial terms, over a period of time, which is usually one year. Also called a Statement of Earnings. |
| Balance Sheet | A picture of a company's financial position at a particular point in time, usually the last day of the year. Also called a Statement of Financial Position. |
| Basic Accounting Equation | Assets = Liabilities + Stockholders' Equity |
| Net Loss | When expenses exceeds revenue. |
| Revenue | Sales that the company earned. |
| Expenses | Costs incurred in generating sales. |
| Assets | Items of value such as building, machinery, equipment, and cash. |
| Liabilities | Represents the company's debt. |
| Stockholders' Equity | Represents the value or "worth" of the company in accounting terms. |
| Net Income | When revenue exceeds expenses. |
| Liquidity | The ability to turn non-cash assets into cash. |
| Equity concept of the Basic Accounting Equation | Assets - Liabilities = Stockholders' Equity |
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