ACCOUNTING Flashcards

1
Q

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

A

STATEMENT OF
COMPREHENSIVE
INCOME

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2
Q

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

A

STATEMENT OF
COMPREHENSIVE
INCOME

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3
Q

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

A

STATEMENT OF COMPREHENSIVE INCOME

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4
Q

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

A

NET INCOME

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5
Q

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

A

STATEMENT OF CHANGES IN EQUITY

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6
Q

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

A

STATEMENT OF CHANGES IN EQUITY

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7
Q

Formula of Equity

A

EQUITY=ASSETS-LIABILITIES

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8
Q

Factors affecting retained earnings

A

LEGAL REQUIREMENT,
CONTRACTUAL REQUIREMENT,
ENTITY POLICY

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9
Q

Other term for investments

A

FUNDS, CONTRIBUTIONS

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10
Q

Requirement for the whole country (law)

A

LEGAL REQUIREMENT

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11
Q

Agreement between partners (Owners & Shareholders)

A

CONTRACTUAL REQUIREMENT

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12
Q

Policy of the corporation

A

ENTITY REQUIREMENT

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13
Q

Formula of SCE

A

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

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14
Q
  • Tracks the inflow and outflow of cash
  • Summarizes the amount of cash
  • Tells whether a company is on solid financial ground
A

CASHFLOW STATEMENT

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14
Q

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

A

LIQUIDITY

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14
Q

Two methods of calculating cash flow

A

DIRECT METHOD AND INDIRECT METHODS

14
Q

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

A

DIRECT METHOD

14
Q

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.

A

INDIRECT METHOD

15
Q

Three main components of CFS

A

OPERATING ACTIVITIES, FINANCING ACTIVITIES, AND INVESTING ACTIVITIES

16
Q

Receipts from sales of goods and services

A

OPERATING ACTIVITIES

17
Q

Interest payments (Any other payments)

A

OPERATING ACTIVITIES

18
Q

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

A

OPERATING ACTIVIES

19
Q

Revenue, Expenses, A/R, A/P

A

OPERATING ACTIVITIES

20
Q

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

A

INVESTING ACTIVITIES

21
Non-Current Assets
INVESTING ACTIVITIES
22
Loans made to vendors or received from customers
INVESTING ACTIVITIES
23
Includes the sources of cash from investors and banks, as well as the way cash is paid to shareholders.
FINANCING ACTIVITIES
24
Dividends payments
FINANCING ACTIVITIES
25
The two expense that need to record but no effect in cash
DEPRECIATION AND AMMORTIZATION EXPENSES
26
Steps on preparing CFS
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