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Financial Statements - Essay Example
Finance & Accounting
Pages 4 (1004 words)
The company owns the resources. Cash is one of the company’s assets (Wild, Shaw, Chiappetta, 2011). Cash includes the coins and paper money. Cash also includes the checks that are paid by the company’s customers. …
The debt amount is recorded as accounts receivable in the company’s books of accounts. The inventory represents items that are being sold in the company’s stores. The inventory also includes unused office supplies, unused cleaning supplies, and other unused items that are owned by the company. The building account is another company asset. Since the company owns the building, the building is included in the assets account. The office equipment is part of the company’s asset account. The office equipment includes the computers, typewriters, calculators, and adding machines. The company has some liabilities to pay (Wild, Shaw, Chiappetta, 2011). The liabilities represent what the company owes its creditors. Similarly, the suppliers may offer the company credit terms when the company buys goods from its suppliers. In exchange for purchased items, the company promises to pay its debts in a few days or months. When this occurs, the company records an accounts payable amount. Further, when company is required to sign a note promising that they will pay the debt within a few days or months, the company records a notes payable amount in its books of accounts. When the company applies or a ten year bank loan, the company records a long term loan amount. ...