ACCT 2001 Chapter : Chapter 2 Notecards
Document Summary
Classified balance sheet helps users evaluate the companies ability to pay its debts and the claims of short-term and long-term creditors. Cash, investments, receivables (accounts receivable, notes receivable, and interest receivable), inventories, prepaid expenses (insurance and supplies) The average time required to purchase inventory, sell it on account, and then collect cash from customers- that is, go from cash to cash. Assets that can be converted into cash, but whose conversion is not expected within one year. Assets not intended for use within the business. Assets with relatively long useful lives that are currently used in operating the business. The allocation of the cost of an asset to a number of years. Account that shows the total amount of depreciation that the company has expensed thus far in the asset"s life. Value of an item as listed on the cost books. Book value = original cost accumulated depreciation.
