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What kinds of records should businesses keep?  Assets  Liabilities  Net worth  Profit and loss statement  Cash receipts  Non-cash receipts  Invoice.

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Presentation on theme: "What kinds of records should businesses keep?  Assets  Liabilities  Net worth  Profit and loss statement  Cash receipts  Non-cash receipts  Invoice."— Presentation transcript:

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3 What kinds of records should businesses keep?  Assets  Liabilities  Net worth  Profit and loss statement  Cash receipts  Non-cash receipts  Invoice

4 Assets  Things that one owns and completely pays for.  Example: Your car after all payments have been made.

5 Assets  Current Assets-items quickly converted to cash or that will be sold within 12 months  cash  checking  savings  stocks or bonds

6 Assets  Non-current-items that have a useful life or more than one year  land  machinery  breeding livestock

7 Liabilities  Things that you owe money to other people for or debts  Example: My Visa

8 Liabilities  Current-debts that are due to be paid this year  fertilizer and feed bills  tractor and building payments  part of the mortgage due this year  Non-Current-debts not due this year  mortgages not due this year

9 Net Worth  One’s assets minus their liabilities.  You have $3000 in the bank, but you owe $1750 for your bills. Your net worth is $

10 Net Worth  Current Assets + Non-Current Assets=Total Assets  Current Liabilities + Non-Current Liabilities=Total Liabilities

11 Inventory  An itemized list of things owned by a business with the beginning value and depreciated value

12 Inventory  Non-depreciable-items that will be used or sold within a year  feed  supplies

13 Inventory  Depreciable-items that have a useful life of more than one year and lose value because of age, wear or becoming out-of date because of technology advancements.  Land is NOT depreciable property  tractor  computer  chainsaw

14 Profit and loss statement  A financial statement of a business that reports the profit made by the business or the losses incurred.

15 Cash receipts  Cash that is paid for services or merchandise.

16 Non-Cash receipts  Payment for services in other ways than cash.

17 Invoice  Shows items and prices for things that have been bought from a certain business.

18 Other business records  Labor  Materials  Travel

19 Debt-to-Equity Ratio  Used by banks and lending institutions to decide whether or not to lend money to specific people or businesses Debt-to-Equity Ratio = Total Liability Net Worth


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