Balance Sheet Flashcard

Front

What happens when a company purchases inventory using cash?

Back

Assets increase, liabilities increase.

Front

If a company’s debt increases while equity remains the same, the debt-to-equity ratio will ____.

Back

Increase.

Front

Which of the following is a non-current asset?

Back

Equipment.

Front

Assets increase, equity ____.

Back

Increases.

Front

Which of the following is considered a current liability?

Back

Accounts Payable.

Front

What is a balance sheet?

Back

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Front

What is the accounting equation?

Back

Assets = Liabilities + Equity.

Front

What are current assets?

Back

Assets that are expected to be converted into cash or used up within one year.

Front

What are non-current liabilities?

Back

Obligations that are due beyond one year.

Front

What is equity in a balance sheet?

Back

The residual interest in the assets of the entity after deducting liabilities.