Business Praxis 5101 - Accounting/Finance and Communications/Career Development

fixed asset asset that is used to generate profit. It will not be turned into cash within the year. Ex: land, buildings, cars, equipment variable asset asset that is transformed to cash within a year. Includes inventory of the actual product. Can also include accounts receivable. intangible asset asset that is a brand name, logo, trademark, and patents. liquidity refers to how easily an asset can be bought or sold on the market at the same price. equity shows what the owner has contributed in addition to the retained earnings. Ownership minus the debts. depreciation refers to how things lose value as time goes on. cash flow refers to the actual cash that is going in and out of a business, such as revenues or expenses. Generally Accepted Accounting Principles GAAP Securities and Exchange Commission SEC Financial Accounting Standards Board FASB cash and accrual accounting the two majors types of accounting systems. cash accounting in this accounting the transactions are counted when the money is actually received or the expenses are paid out. accrual accounting in this accounting the transactions are counted when the orders are made or delivered, even if no cash has actually been exchanged. Assets = Liabilities + Owner's Equity accounting equation trial balance a document showing the ending balances of ledger accounts