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Accounting - The Lan
Question | Answer |
---|---|
Primary reason to keep records | is to know whether or not your company made a profit or a loss |
Who Needs These Records? | Manager and Owner |
What are suppliers? | Decide whether to extend credit |
What is a Lender? | Decide whether to lend a business money |
What does the government have to do with accounting? | Arrive at fair tax rates |
What are Financial Statements? | Reports that summarize financial data over a period of time |
What is a Balance Sheet? | Reports a business’s assets, liabilities, and capital on a specific date |
Can you tell me the accounting equation? | Assets = Liabilities + Capital |
What are some examples of Assets? | Cash&Accounts Receivable&Inventory&Buildings |
What are some examples of Liabilities? | Accounts Payable Loans Payable |
What is a Capital? | The amount an organization or individual is worth |
What is the difference between Cash Flow and Working Capital? | Cash Flow- Must have cash on hand to pay bills Working Capital-Determine if you are able to pay your debts |