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Terms in this set (29)
Income statement reports on ___
Sales minus expenses
Revenue - cost of goods
Gross Profit - Expenses
Income statement and balance sheet are linked via
Contributes Capital appear on
Stockholders equity and balance sheet
_______ is linked to the income statement as net income is a component of operating cash flow
The statement of cash flow
Assets are listed in order of
Liabilities are listed in order of
Accrued liabilities refer to
Current Asset - Current liability
Net working capital
Current assets comprise assets
that can be converted to cash within a year
cannot be easily converted to cash within a year.
goods purchased or produced for sale to customers;
costs paid in advance for rent, insurance, advertising or other services.
assets without physical substance, including patents, trademarks, franchise rights, goodwill and other costs the company incurred that provide future benefits.
Original acquisition cost
current market value
historical cost measure
Knowledge Based Assets are not Reflected on the Balance Sheet
While resources expended for research and development reflect and economic asset, they generally are expensed as incurred.
amounts owed to suppliers for goods and services purchased on credit.
Equity consists of
Earned capital and retained earning
accumulated net income (profit) that has NOT been distributed to stockholders as dividends
Revenue Recognition Principle
Recognize revenue when earned
recognize expenses when incurred
recognition of revenue when earned (even if not received in cash) and the matching of expenses when incurred (even if not paid in cash).
Statement of Cash flow
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash is paid or received AFTER expenses and revenues are recognized
Realized or realizable means
seller's net assets (assets less liabilities) increase.
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