ACCOUNTING

Question 1

The sum of a
company’s net income
and other____.

Answer 1

STATEMENT OF
COMPREHENSIVE
INCOME

Question 2

Includes net
income and unrealized
income and losses, it
provides the big picture of a
company’s value.

Answer 2

STATEMENT OF
COMPREHENSIVE
INCOME

Question 3

Useful for investors because the
information can help their
decision-making where the
company’s feasibility as a
potential investment is
concerned.

Answer 3

STATEMENT OF COMPREHENSIVE INCOME

Question 4

Arrived at by
subtracting cost of goods sold,
general expenses, taxes, and
interest from total revenue.

Answer 4

NET INCOME

Question 5

Is a business’ financial
statement that measures the
changes in owners’ equity
throughout a specific
accounting period.

Answer 5

STATEMENT OF CHANGES IN EQUITY

Question 6

Define as the residual interest in
the assets of an entity after
deducting all the liabilities.

Answer 6

STATEMENT OF CHANGES IN EQUITY

Question 7

Formula of Equity

Answer 7

EQUITY=ASSETS-LIABILITIES

Question 8

Factors affecting retained earnings

Answer 8

LEGAL REQUIREMENT,
CONTRACTUAL REQUIREMENT,
ENTITY POLICY

Question 9

Other term for investments

Answer 9

FUNDS, CONTRIBUTIONS

Question 10

Requirement for the whole country (law)

Answer 10

LEGAL REQUIREMENT

Question 11

Agreement between partners (Owners & Shareholders)

Answer 11

CONTRACTUAL REQUIREMENT

Question 12

Policy of the corporation

Answer 12

ENTITY REQUIREMENT

Question 13

Formula of SCE

Answer 13

ENDCAPITAL = BEG.CAPITAL + INVESTMENT + PROFIT/NET INCOME - WITHDRAWAL - L (NET LOSS)

Question 14

• Tracks the inflow and outflow of cash
• Summarizes the amount of cash
• Tells whether a company is on solid financial ground

Answer 14

CASHFLOW STATEMENT

Question 14

Determine how much cash is available for the company to fund its
operating expenses and pay down its
debts.

Answer 14

LIQUIDITY

Question 14

Two methods of calculating cash flow

Answer 14

DIRECT METHOD AND INDIRECT METHODS

Question 14

Method of CFS that actual cash
inflows and outflows are known
amounts.
- Listing
all cash receipts and payments during the
reporting period.

Answer 14

DIRECT METHOD

Question 14

Method of CFS that actual cash
inflows and outflows do not have to be
known.
- starts with
net income and adjusts for changes in non-cash
transactions.

Answer 14

INDIRECT METHOD

Question 15

Three main components of CFS

Answer 15

OPERATING ACTIVITIES, FINANCING ACTIVITIES, AND INVESTING ACTIVITIES

Question 16

Receipts from sales of goods and services

Answer 16

OPERATING ACTIVITIES

Question 17

Interest payments (Any other payments)

Answer 17

OPERATING ACTIVITIES

Question 18

It reflects how
much cash is generated from a
company’s products or
services.

Answer 18

OPERATING ACTIVIES

Question 19

Revenue, Expenses, A/R, A/P

Answer 19

OPERATING ACTIVITIES

Question 20

Include any sources and uses of
cash from a company’s
investments.

Answer 20

INVESTING ACTIVITIES

Question 21

Non-Current Assets

Answer 21

INVESTING ACTIVITIES

Question 22

Loans made to vendors or
received from customers

Answer 22

INVESTING ACTIVITIES

Question 23

Includes the sources of cash
from investors and banks, as
well as the way cash is paid to
shareholders.

Answer 23

FINANCING ACTIVITIES

Question 24

Dividends payments

Answer 24

FINANCING ACTIVITIES

Question 25

The two
expense that need to
record but no effect in
cash

Answer 25

DEPRECIATION AND AMMORTIZATION EXPENSES

Question 26

Steps on preparing CFS

Answer 26

1 . Gather Financial Statements
2. Determine the Reporting Period
3. Choose the Method
4. Prepare the Statement
5. Combine All Sections
6. Reconcile with Beginning Cash