Balance Sheet
A balance sheet is a financial statement that shows the financial position of a company. It shows company assets, liabilities, and equity. The balance sheet is a snapshot of what the company owns and owes on a specific date. The…
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Income Statement
The income statement shows the performance of a company over a period. The format is revenue minus expenses. If revenues are higher, the company has earned a net profit or net income. If the expenses are higher, the company has…
Accounting Information System
The accounting information system records transactions and summarizes the results. The goal of accounting is to issue financial statements. The accounting system records transactions and prepares financial statements. Chapter 3: Accounting Information System This is Intermediate Accounting Chapter 3. For…
Liquidity Ratios
Liquidity ratios show the ability of a company to pay its short-term debts. The liquidity ratios include the current ratio, quick ratio, and cash ratio. Liquidity ratios compare current assets and current liabilities to determine a company’s ability to pay…
Expense
Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an asset. What is an expense? Expenses are one of the…
Financial Terms Dictionary
This financial dictionary of over 200 financial terms will teach you many important financial concepts. This is important to increase your financial literacy.