What is the purpose of the balance sheet? - Answer -Report the financial position of the
business
What is the purpose of the income statement? - Answer -Report business performance
What is the purpose of cash flows? - Answer -Monitor incoming and outgoing money
What is the key takeaway of the balance sheet? - Answer -Can the business meet
current financial obligation?
What is the key takeaways of the income statement? - Answer -How can the business
improve performance?
What are the key takeaways of the statement of cash flows? - Answer -Where is my
money generated and spent during a time period?
What are the components of the balance sheet? - Answer -Assets, liabilities, and equity
What are the components of the income statement? - Answer -Revenues and
expenses
What are the components of the statement of cash flows? - Answer -Cash in, cash out.
Why should we track assets? - Answer -Info from recorded sales, inventory, assets,
and depreciation show a business's financial performance, resources, and obligations.
Current Assets - Answer -Assets that can be converted into cash quickly (within a year)
Fixed Assets (long-term assets) - Answer -Long term assets are acquired for the long-
term benefit of the business. They extend beyond a year.
What are types of current assets? - Answer -Cash (or cash equivalents), AR, Inventory,
Prepaid expenses, Investments (marketable securities), Notes receivable
Notes Receivable - Answer -Money that is owed to a business, so it is considered an
asset.
What are types of fixed assets? - Answer -PP&E and intangible assets
What are intangible assets? - Answer -Copyrights, Patents, IP, Goodwill
What are the steps to tracking assets? - Answer -1. Identify the asset type
2. Check if there's an existing account in the chart of accounts.
3. If needed, add the account