Flashcards in Ch. 2: Financial Statements Deck (12)
The period of time, no more than 1 year, covered by the three financial statements.
An asset that can reasonably be expected to be used up or converted into cash or sold within 1 year or less.
A debt that is payable within 1 year or the current accounting period, whichever is longer.
An asset that cannot readily be seen or touched. Examples include copyrights, franchises, patents, and trademarks. Intangible assets have no physical substance, but are of value to the owners of the organization. This value is based on rights or privileges belonging to the owner.
Interim (Financial) Statement
A statement prepared for any period of time that is less than a complete accounting period (1 year).
Assets that are not used in the operation of a business, and are not expected to be converted into cash within 1 year.
an obligation that is not expected to mature and become payable within 1 year. A mortgage note payable is an example of this type of liability.
Property, Plant, and Equipment
Assets that have a useful life of more than 1 year and are used in the continuing operations of the organization.
A financial statement that shows the financial position of a business at a particular moment in time—a detailed presentation of the assets, liabilities, and owner’s equity. Actually, it is a detailed accounting equation, in which the total value of the assets is equal to the total liabilities plus proprietor’s capital.
A financial statement that presents revenue and expenses and resulting net income or loss for a specific period of time.
Statement of Capital
A financial statement that shows the change in the value of the ownership in a business over a period of time. The change in capital is due to income or loss and withdrawals by the owner over a period of time.