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Chapter 2

Ch. 2


Department
Accounting
Course Code
ACC 100
Professor
Else Grech
Chapter
2

Page:
of 1
ACC 100: Chapter 2 Notes
BALANCE SHEET:
Snapshot of company
s financial position at a point in time (A = L + SHE).
To improve information for external users need to GROUP similar assets and liabi
lities together.
WHY? Because groupings show items have similar economic characteristics
provide
s MORE and BETTER information
3 Characteristics of Assets:
Owned by the company
Physical good or legal right
Has future economic benefit for the company
3 Characteristics of Liabilities:
Owed to outside parties
Due at a future date
Paid in cash or goods or services
Future Test Material:
NOTE:
You must be able to list, and understand, what accounts belong in each of these
groupings and WHY they belong there. In addition, in WHAT ORDER should accounts
be listed within each grouping!
Current Assets
Long-Term Investments
Property, Plant, and Equipment
Intangible Assets
Current Liabilities
Long Term Liabilities
Shareholders
Equity