Cheat Sheet - Success Formula (Page 3 of 3) in pdf

Cheat Sheet - Success Formula Page 3

Term definition (2/2)

7. Money that will be paid in the foreseeable future; two main categories for this course

A. Accounts: to your supplies

B. Notes: to your creditors (people you received money from)

C. Other: interest, tax, dividend …

8. Money that you will pay back in the foreseeable future to the bank

9. Money you received in advanced from your client for future service or product

10. Money you will pay back in the long run (more than 1 year) to the bank

11. Money invested by the company owners in the company (also called common stock if company

has shareholders)

12. Profit kept over the year (not paid as dividend)

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Calculated as: new retained earnings = old retained earnings + revenue – expense – dividends

A. HIDDEN: Revenue (temporary account): amount recognized in exchange of service or product given

B. HIDDEN: expense (temporary and contra account): amount recognized in exchange of service or

product received

C. HIDDEN: dividend (temporary and contra account): amount recognized as dividend (paid from

profit) to the owners

Cheat Sheet - Success Formula Page 3