Key Learning Points:
Money Measurement Concept - Only that information that are expressed in monetary terms are being recorded. Entity Concept - A unit, which controls & prepares reports that is related to money or accounting reports. Costs
A.) Nonmonetary Assets- Cash value not fixed by contract; Ex. Land.
B.) Monetary Assets- Cash value is fixed by contract. Ex. money Fair Value - An amount at which the asset could be exchanged in a present transaction between agreed parties.
A.) Liabilities- Anything that is to be paid in the future. It can be loans, debts, employees’ wages & etc.
a.) Current Liabilities – Liabilities that are expected to be settled within 1 year of the balance sheet date.
b.) Other Liabilities – Long-term debt.
B.) Owner’s Equity – owner’s share of the assets in a business.
C.) Shareholder’s Equity – company’s capital which is invested by shareholders. Economic Resource – either cash or raw materials that can be sold or items that are going to be used for future activities that the company will gain money. Balance Sheet – it is where you can the reported assets and equities of an entity at a specified time. Assets – Anything that is owned by a company that can be sold to make cash.
A.) Current Assets – assets owned by the business that can be turned into cash quickly such as: cash, stocks or money owed to the entity.
B.) Fixed Assets – Assets that are needed for long-term usage for future cash inflows.
C.) Intangible Assets – Assets that can’t be held or touch such as investments.
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