PPL 2010 Study Guide - Financial Statement, Current Liability, Accounts Receivable

• School: University of Virginia
• Department: Political Philosophy, Policy, and Law
• Course: PPL 2010
• Professor: All

Document Summary

The balance sheet is a company"s financial report card: 3 components: assets, liabilities, and stockholders" equity. Balance sheet accounts carry over from one period to the next: ^^ the ending balance from one period becomes the beginning balance for the next. Asset a resource that is expected to provide a company with future economic benefits: when a company incurs a cost to acquire future benefits, that cost is capitalized and an asset is recorded, 2 characteristics: Must be owned or controlled by company (by cash, trading assets, or assuming an obligation) Must possess expected future benefits that can be measured. Benefits = expected cash receipt, receipt of other noncash assets (accounts receivable or the reduction of a liability) *companies acquire assets to yield a return for their shareholders either : directly ex. Inventory that is sold: assets must yield income that is greater than the cost of the funds to acquire them.