5 classes:
- Asset
- Liability
- Equity
- Revenue
- Expense
Assets: company’s economic resource
- Cash and cash equivalent
- Accounts receivable: have “allowance for bad debt” as contra accounts
- Inventory
- Financial assets: marketable stocks
- Prepaid expenses (9)
- Expense on future income statement
- Property, plant and equipment
- Investment in affiliates
- Deferred tax asset (8)
- Intangible assets
- Patents, trademarks, licenses
Liabilities: creditor claim on company’s resource
- Accounts payable
- Income taxes payable (10)
- Financial liabilities: short term notes payable
- Long-term debt (11)
- Bond
- Unearned revenue (9)
- Deferred tax liabilities
Owner’s equity
- Capital: par value of common stock
- Additional paid-in capital
- Stock sales in excess of par value
- Retained earnings (12)
- Net dividend that is not distributed
- Comprehensive income
- Foreign currency
- Minimum pension liability adjustment
Revenue
- Sales: day-to-day activities
- Gains (13)
- Increase in firm asset from transaction incidental firm’s day-to-day activities
- Investment incomes (14)
- Interest and dividend income
Expense
- Cost of goods sold (15)
- Selling, general and administrative expense
- Depreciation and amortization
- Tax expense
- Interest expense
- Losses
- from transaction incidental firm’s day-to-day activities