ACC 300 Chapter 5 Flashcards
Debt investment
Ready to sell is current asset
Available for sale are either asset depending on circumstances
Treasury stock
Reduction of stockholders equity
Common stock
Stockholders equity
Dividends payable
Current liability
Accumulated dep equipment
P,p and e
Construction in process
If constructed by outside company it is inventory for them. If you are constructing it it is ppe
Petty cash
Current asset
Interst payable
Current liability
Deficit
Retained earnings
Equity investment
Current asset if expexted to trade within one year
Income tax payable
Current liability
Unearned subscriptions revenue
Current liability
Work in process
Current asset
Salaried and wages payable
Current liability
Preferred stock
Capitail stock
Goodwill
Intanglible assets
Accounts payable
Current liability
Buildings
Ppe
Current maturity of long term debt
Current liability
Premium on bonds payable
Noncurrent liability
Allowance for doubtful accounts
Current assets
Accounts recievable
Current assets
Cash surrender value of life insurance
Investment
Notes payable
Current liability
Supplies
Current asset
Bond sinking fund
Investments
Bonds payable
Noncurrent liabily
Similarities for GAAP and IFRS
Both can title balance sheet or statement of financial position, both require comparitice prior period info and prepared annually, require presentation of non controlling interest in equity section
Differences for GAAP and IFRS
Ifrs has current assets listed in reverse order of liquidity, many differences in terminology, reserve isnt used in gaap
Current cash debt coverage ratio
Net cash provided by operating/average current liabilies
Cash debt coverage ratio
Net cash provided by operating activities/average total liabilities
Free cash flows
Cash provided by operating-capital expenditures-dividends
Working capital
Current assets-current liabilities
EPS
Net income-perferred dividends/weighted average of common shares outstanding
Usefulness of the balance sheet
Provides info about assets liabilites and equity, aids in assesting risk and predicting future cash flows, evaluation of liquidity solvency and financial flexibility
Limiations of balance sheets
Most assets and liabilities are reported at historical cost not fair value, judgements must be utilized in determining collectibility, useful life, and returns
Current assets
Cash and other assets a company expects to covert into cash, sell, or consume either in one year or operating cycle
Current liabilities
Obligations that are reasonablu expected to be liquidated though the use of current assets or the creation of other current liabilites
Long term liabilities
Obligations that are not reasonaly expected to be liquited within the normal operating cycle
Purpose of the statement of cash flows
Is to provide relevent info about the cash receipts and cash payments of a company during a period
Significant noncash activites
Reported in either a separate schedule at the bottom or in a note
Current cash debt coverage
Used to determine whether a company can pay off its current liabilities from its operating activities. Evaluates financial liquidity
Cash debt coverage
Used to determine whether a company can repay its liabilities from its operating activities. It evaluates financial flexibility
Free cash flows
Used to determine the discretionary cash flow a company has to purchase additional investments retire debt purchase treasury stock or ass to its liquidity
