3 | Balance Sheet & Financial Disclosures Flashcards

Question

Classifications | Other Assets The catch-all classification of noncurrent assets. This includes...

Answer 1

...long-term prepaid expenses.

Answer 2

...Accounts payable, Notes Payable, Unearned Revenues, Accrued Liabilities, and the current maturities of long-term debt.

Answer 3

...management intends to refinance on a long-term basis.

Answer 4

...deferred revenues.

Answer 5

...created when expenses have been uncurred but will not be paid untill a subsequent reporting period.

Answer 6

1) Salaries Payable 2) Interest Payable 3) Taxes Payable

Answer 7

current liabilities.

Answer 8

1) Long-Term Notes 2) Bonds 3) Pension Obligations 4) Lease Obligations

Answer 9

The stocholder's claim in the asset of business.

Answer 10

+ paid-in-capital | + retained earnings (Rev. - Exp. - Dividends) + Accum. Other Comprehensive Income/Loss.

Answer 11

Net Assets, Shareholder's Equity, or Stockholder's Equity.

Answer 12

Amounts invested by shareholders in the corporation.

Answer 13

Amounts earned by the corporation.

Answer 14

... valuable information about the company's choices from among various alternative accounting methods.

Answer 15

...significant developments that occured after a company's fiscal year-end but before the financial stateemnts are issued or available to be issued.

Answer 16

1) Issuance of debt/equity securities 2) business combination 3) Sale of a business 4) Sale of an asset 5) An event that sheds light on the outcome of a loss contingency.

Answer 17

...occasionally and are potentially important to evaluating a company's financial statements.

Answer 18

1) Related-party transactions 2) Errors 3) Irregularities 4) Illegal acts

Answer 19

...dollar amounts involved.

Answer 20

...errors are unintentional while irregularities are intentional distortions of financial statements.

Answer 21

...Management Discussion & Analysis

Answer 22

...management's discussion & analysis on significant events, trends, & uncertainties pertaining to operations, liquidity, & capital resources. It is required.

Answer 23

...for the information contained in the annual report as well as an assessment of internal control procedures.

Answer 24

...certify the financial statements.

Answer 25

20 years in jail.

Answer 26

independent and professional opinion about the fairness of the representations in the financial statements and about the effectiveness of internal controls.

Answer 27

1) Lack of consistency due to a change in accounting principle. 2) Uncertainty as to the resolution/estimate of a contingency 3) Emphasis of a significant event such as a related-party transaction

Answer 28

1) nonconformity with GAAP 2) Inadequate disclosures 3) Limitation/restriction of the scope of the examination

Answer 29

...company conforms to GAAP and the Statements "present fairly" the financial position of the company. It is a "Clean" result.

Answer 30

...company contains exceptions but not of sufficient sseriousness to invalidate the Statements.

Answer 31

...company's nonconformity to GAAP and inadequate disclsures are so serious that a qualified opinion is unjustified.

Answer 32

...auditor disclaims an opinion since limitation/restrictions of the scope of the examination was such that insufficient information was gathered to express an opinion.

Answer 33

... continue for a reasonable time as a going concern.

Answer 34

1) must be sent annually to shareholders 2) Invites holders to meeting to elect board & vote on issues 3) contains disclosures on compensation to Directors & Executives.

Answer 35

Statements issued with the corresponding previous 1 - 2 year(s)' Statements to allow users to compare the year-to-year financial position, results of operations, & cash flows.

Answer 36

Each item of the Financial Statement is expressed as a percentage of the same item from a previous year in order to more easily see year-to-year changes.

Answer 37

Each item of the Financial Statements is expressed as a percentage of the appropriate corresponding total (i.e. Net Income)

Answer 38

Current Assets ______________ Current Liabilities

Answer 39

Quick Assets (Current Assets - Prepaid Exp - Inventory) __________________________________ Current Liabilities

Answer 40

Current Assets - Current Liabilities A popular measure of a company's ability to satisfy its short-term obligations.

Answer 41

If it's above 1 - adding inventory decreases it If it's below 1 - adding inventory increases it

Answer 42

...the extent of reliance on creditors, rather than owners, in providing resources.

Answer 43

Total liabilities _________________ Shareholders’ equity * The higher this ratio - the higher this risk

Answer 44

Net Income + Interest expense + Income Taxe _____________________________________ Interest Expense

Answer 45

...supllemental information concerning individual operating segments (not complete financial statements)

Answer 46

1) Activities generates revenues & expenses (including transactions with other components of the same enterprise. 2) Results are regularly reviewed by enterprise chief operating decision maker for decisions about resources & performance. 3) Discrete financial information is available 4) Size must be 10% or more than total revenues, assets, or net income. 5) 75% of consolidated revenue must be covered in segment disclosures

Answer 47

1) General info about the segment 2) Info about profit/loss that includes related revenues/expenses, segment assets, & basis of measuremnt. 3) Reconciliations of segment totals to corresponding enterprise amounts. 4) Interim period informaiton.

Answer 48

... it is impracticable to do so.

Answer 49

...the country of domicile & foreign contries.

Answer 50

the total amount of revenue from each such customer and the segment earning the revenue.