Classifications on the Balance Sheet
Income Taxes Payable
Notes Receivable (Due in 5 months)
Discount on Bonds Payable (longterm bonds)
Computer Equipment in the Data
Land Held for Future Expansion
Chapter 5: The Income Statement
and the Statement of Cash Flows
While the balance sheet represents a company's financial position, the income statement represents its
The income statement summarizes the results of a company's financ
Chapter 5 Definitions
A series of equal cash flows (deposits, receipts, payments, withdrawals) occurring at regular intervals with interest
compounded at a specified rate.
An annuity is referred to as an annuity due if the cash flows o
Chapter 4: The Balance Sheet and
the Statement of Shareholders'
4-2: What Elements Are Recognized on the Balance
Recognition is the process of formally recording and reporting an element in the financial statements.
Assets are t
Chapter 4 Definitions
Measures the number of times accounts payable turn over during the year; is computed as: Accounts Payable
payable turnover Turnover = Inventory Purchases* / Average Accounts Payable *Inventory Purchases = Cost of Goods Sold
Chapter 3: Review of a Company's
3-1: What Are the Components of an Accounting System?
The primary purpose of a company's accounting system is to record, organize, summarize, and report
useful information to external financial statement
Chapter 3 Definitions
Accounting cycle A series of steps during each period to record, store, organize, summarize, and report the accounting information
contained in its transactions, events, and arrangements.
Assets = Liabilities + Sh
Chapter 1 Definitions
Professional standards (U.S. GAAP and IFRS) for how companies should account for and report revenues,
expenses, assets, liabilities, and equities that provide the concepts, rules, gui