Chapter_2 - Chapter 2 The Classified Balance Sheet The...

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Chapter 2 The Classified Balance Sheet The balance sheet is divided into short term or current and long-term sections. Short is one year or less. Long term is in excess of one year. Assets: Things we own. Current Assets: Cash, things that will be converted to cash (accounts receivable or inventory) or used up (prepaids or supplies) within one year. Investments: Financial assets (stocks, bonds, etc), or assets owned but not used by the company. (Land held for expansion.) Property, Plant, and Equipment: Land, buildings and equipment used by the business. Intangible Assets: Assets with no physical form. We do own them and they have value. Patent, copyright, and trademark are examples of intangibles. These give us certain legal rights. Liabilities: Things we owe. Current liabilities: Anything due within one year. Accounts payable is an example of a current liability. Long term liabilities: Things do in excess of one year. Bonds Payable or Mortgage Payable are examples of long term liabilities. Stockholders Equity: The claims on assets of the owners. Paid In Capital: Common stock Earned Capital: Earnings from past years that have been retained in the company. Ratio analysis My apologies that the text has dropped ratios are into this chapter with little context. Earnings per share tell how much the company has earned for each share of common stock.
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This note was uploaded on 02/22/2011 for the course ACCT 2021 taught by Professor Leonard during the Spring '11 term at St. Petersburg College.

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Chapter_2 - Chapter 2 The Classified Balance Sheet The...

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