Show Menu

Accounting Balance Sheet Terms Cheat Sheet by

Accounting Balance Sheet Terms
accounting     sheet     terms     balance     analyze     glossary

Glossary of Terms

Allo­wance for Bad Debts - Amount of estimated debt to the business that is not expected to be repaid and is subtracted from accounts receivable on the balance sheet. Also known as an allowance for doubtful accounts.
Assets - Anything that a business owns that has monetary value.
Accounts Payable - Debts of the business, often to suppliers, and generally payable within 30 days.
Accounts Receivable - An amount owed to the business, usually by one of its customers, as result of the extension of credit.
Accrued Payroll Taxes - Taxes payable for employee services received, but for which payment has not yet been made.
Balance Sheet - A financial statement showing the assets, liabil­ities, and net worth of a business as of a specific date.
Current Assets - Cash and other assets readily converted into cash. Includes accounts receiv­able, inventory, and prepaid expenses.
Current Liabil­ities - The debts of a company which are due and payable within the next 12 months.
Current Ratio - Current assets divided by current liabil­ities.
Debt­/Worth Ratio - Total Liabil­ities divided by Net Worth.
Depr­eci­ation - An accounting convention to take into account the physical deteri­oration of an asset. It is a systematic method to allocate the historical cost of the asset over its useful life.
Fixed Assets - Also called long-**­term assets with a relatively long life that are used in the production of goods and services, rather than being for resale.
GAAP - Abbrev­iation of Generally Accepted Accounting Princi­ples. Conven­tions, rules, and procedures that define accepted accounting practice.
Inve­ntory - Goods held for sale, raw material and partially finished products which will be sold when they are finished.
 

Continued

Liab­ilities - Debts of the business.
Liqu­idity - The ability to produce cash from assets in a short period of time.
Long­-Term Liabil­ities - Debts of a company due after a period of 12 months or longer.
Net Worth - The business owner’s equity in a company as repres­ented by the difference between assets and liabil­ities.
Owners’ Equity - See Net Worth.
Quick Ratio - Current Assets minus Inventory, divided by Current Liabil­ities. Also known as the acid test.
Working Capital - Current Assets minus Current Liabil­ities.

Checklist

Assets
____ Have you included all current assets?
____ Did you adjust accounts receivable for bad debts?
____ Is inventory valued at replac­ement cost?
____ Did you include all approp­riate prepaid expenses?
____ Did you include any instal­lation or delivery costs for fixed assets?

Liab­ilities and Net Worth
____ Have all liabil­ities, both current and long term, been included?
____ Did you include all startup expenses payable in more than one year in long-term liabil­ities?
____ Do assets minus liabil­ities equal net worth?

Fina­ncial Ratio Analysis
____ Did you compute a current ratio, quick ratio, working capital and debt/worth ratio for your business?
____ Is your current ratio greater than or equal to two? If not, do you know what adjust­ments might be made?

Download the Accounting Balance Sheet Terms Cheat Sheet

1 Page
//media.cheatography.com/storage/thumb/davidpol_accounting-balance-sheet-terms.750.jpg

PDF (recommended)

Alternative Downloads

Share This Cheat Sheet!

 

Comments

No comments yet. Add yours below!

Add a Comment

Your Comment

Please enter your name.

    Please enter your email address

      Please enter your Comment.

          Related Cheat Sheets

          Credit Card Processing Terms Cheat Sheet

          More Cheat Sheets by Davidpol

          How Meditation Affects Your Brain Cheat Sheet
          Chapter 13 Bankruptcy Cheat Sheet
          Core Principles of ETI Guidance Cheat Sheet