accounting- classifications on a balance sheet/ homework
current asset; debit
cash
investing
cash received from selling equipment
Stockholders' Equity; credit
common stock
revenues
earned by selling goods or services to customers
non current asset; debit
equipment
noncurrent asset; debit
land
Inventory
merchandise held for sale
current asset; debit
prepaid rent
stockholders equity; credit
retained earnings
accounts receivable
right to collect on an account
current asset; debit
supplies
expenses
the cost of business necessary to earn revenues
Seperate entity
the financial reports of a business are assumed to include the results of only that business's activities
Assets
the resources owned by a business
Stockholders' Equity
the total amounts invested and reinvested in the business by its owners
credits
use for decreases in assets and increases in liabilities and stockholders exchange
Debits
use for increases in assets and for decreases in liabilities and stockholders exchange
liabilities
Amounts owed by the business
financing outflow
Cash paid on notes payable
operating outflow
Cash paid to suppliers and employees
operating inflow
Cash received from customers
financing
Cash received from issuing stock
current liability; credit
Income Taxes Payable
noncurrent liability; credit
Notes Payable (long-term)
current liability; credit
Notes Payable (short term)
investing outflow
Purchase of equipment
relevence
a feature of financial information that allows it to influence a decision
current liability; credit
accrued liabilities
accounts payable
amounts owed to suppliers
Cost Principle
A principle that states that acquired assets and services should be recorded at their actual cost.
current liability; credit
Accounts Payable
current asset; debit
Accounts Receivable
Faithful Representation
Financial information that depicts the economic substance of business activities
