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The Financial Statements definitions Flashcards

The Financial Statements definitions
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  • Balance Sheet
    Snapshot showing assets, liabilities, and equity at a specific date, illustrating the fundamental accounting equation.
  • Income Statement
    Report detailing revenues and expenses over a period, culminating in net income as the bottom line.
  • Statement of Cash Flows
    Summary of cash inflows and outflows from operating, investing, and financing activities over a period.
  • Statement of Stockholders' Equity
    Record of changes in equity accounts, including retained earnings and dividends, across a period.
  • Assets
    Resources owned by a company, such as cash, inventory, and equipment, expected to provide future benefits.
  • Liabilities
    Obligations to pay debts or provide services to others, including payables and accrued expenses.
  • Equity
    Residual interest in company assets after liabilities, representing owners' claims.
  • Revenue
    Income generated from normal business operations, such as sales or services provided.
  • Expenses
    Costs incurred in generating revenue, including payroll, rent, and utilities.
  • Net Income
    Resulting profit or loss after subtracting all expenses from total revenues for a period.
  • Retained Earnings
    Cumulative net income kept in the business after dividends are distributed to shareholders.
  • Dividends
    Distributions of company profits to shareholders, reducing retained earnings but not classified as expenses.
  • Accounts Receivable
    Amounts owed to a company by customers for goods or services delivered but not yet paid for.
  • Accounts Payable
    Amounts a company owes to suppliers or vendors for goods or services received but not yet paid.
  • Common Stock
    Equity account representing ownership shares issued to investors, reflecting their stake in the company.