D103 Intermediate Accounting I - Set 1 - Part 1

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This entry records the annual depreciation expense for the equipment over its useful life.

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This entry records the interest expense accrued for the year on the outstanding debt.

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This entry records the expense for salaries that have been earned but not yet paid.

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Liquidity refers to how quickly an asset can be converted into cash or how soon a liability must be settled.

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Solvency is the measure of a company's ability to meet its long-term financial obligations.

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Financial flexibility refers to a company’s ability to adapt its financial strategies to changing conditions.

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The balance sheet is divided into these three sections to provide a clear view of a company's financial position.

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The balance sheet can be presented in either account form (with assets on the left and liabilities and equity on the right) or report form (with assets, liabilities, and equity listed one below the other).

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Cash equivalents are assets that are easily convertible to cash, typically with very short maturities.

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Cash includes physical currency and funds available on demand in bank accounts.

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These classifications determine how the securities are reported on the balance sheet based on management's intent.

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This category includes physical assets such as buildings, machinery, and equipment that are used in operations.

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Intangible assets do not have a physical form but still provide value to a company.

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Working capital is a measure of a company's short-term financial health and operational efficiency.

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The stockholders' equity section reflects the ownership interest in the company, including capital stock issued.

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This account tracks the cumulative amount of income and expenses not recognized in net income.

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Treasury stock represents shares that were once a part of the outstanding shares but were later repurchased by the company.

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This account reflects changes in the value of certain investments that have not yet been sold.

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Current assets are presented in order of liquidity, starting with the most liquid assets.

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Customer lists are considered intangible assets as they do not have a physical presence but represent value.