ACCT 201 1st Edition Lecture 5 Outline of Last Lecture I Description of Statement of Cash Flows II Description of Balance Sheet Outline of Current Lecture II Continued description of Balance Sheet Current Lecture Balance Sheet Assets Liability Shareholders Equity SE Assets Listed from most liquid to least liquid how quickly something can be turned into cash 1 Current assets Cash highest liquidity Account receivable the right to receive money in the future Inventory 2 Long term investments 3 Property Plant and Equipment P P E 4 Intangible Assets copyrights trademarks etc goodwill the most monetary asset is the difference between the amount of money used to purchase a copyright and the amount of money made buy selling the copyright 5 Other used for exceptions and is rarely used Liability 1 Current liabilities payable obligation to pay for something Eg Accounts wages salary sales tax property tax income tax etc Unearned revenue 2 Long term liabilities These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Shareholders Equity 1 Contributed capital common stock 2 Retained Earnings a Net Income Profit i Revenues ii Expenses b Dividends cash payments to stockholders Example of the accounting equation on a balance sheet Assets Liability Shareholders Equity SE 120 000 90 000 30 000 90 000 50 000 40 000 No matter what the values of liability and SE must equal that of the assets If one value is missing you will always know what it is through simple addition subtraction
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