Document Summary

Midterm: chapter 1-4 may be 5 y it will cover chapter 4 for sure. Chapter 4: the balance sheet y balance sheet shows how much stuff an individual shows y shows the value of assets and liabilities y assets any anything that a business can sell. Liabilities y if you borrow to buy an asset you must pay it back y example, credit card, car loan. Equity y if someone gives you the money or if you have earned the money no need to repay. Typical business assets y cash: bank accounts, petty cash, float y raw materials: bread cheese, tomatoes y inventory: products ready to be sold y real estate: office buildings factories y machinery or equipment: van, computers. Business equity y share capital: shareholders invest money to start a business y earnings: business makes profit buys more assets y equity: money supplied by the owners, assets bought with owners money.