Flash Cards

Diego Santos

Assets
A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. For example the land owned by the owners of Quicentro in the centre of town are assets and are rent for the people of the centre of town to use as parking lots.

Balanced Sheet
The balance sheet is a financial statement of a business that lists the assets, debts, and owners investment as of a specific dateusually last date of an accounting period. Example: At the end of each month the restaurant Savalita makes a balance sheet.

Depreciation
Depreciation is a non-cash expense that reduces the value of an asset as result of wear, tear, age, or obsolesce. Last year Adidas shoes (predator) have a high depreciation since adidas has released 4 models with greater quality materials.

Liabilities
Liabilities are financial obligations, debt or claims on the business. These are anything owed by the business when the balance sheet is prepared. The British school Quito has liabilities to pay the teachers.

Overdrafts
These are short term borrowing from banks. Firms often use this as a means to make up for working capital shortages. When a firm need extra money in order for a business opportunity to occur they usually recur to this since they will be able to pay it shortly afterwards the deal has passed.