C1: INTRO Flashcards
Shareholders and investors are also known as:
Owners
________ lend money / extend credit to a business.
Creditors
What does CRA stand for?
Canada Revenue Agency
Who are usually the internal users of a financial statement?
Management
Who are the federal taxing authority in Canada?
Canada Revenue Agency
Your personal assets are NOT at risk if you form which type of business?
Corporation
Owners are responsible for debts of the company if it is a:
Proprietorship or Partnership
T/F: Partnerships are the most expensive to establish and maintain.
False
What are common shares?
Certificates that represent portions of ownership in a corporation.
Raising funds to support other activities by issuing new shares or borrowing money is an example of:
Financing Activities
Purchase shares seeking to generate return.
Shareholders (Investors)
Payments made by a company to shareholders that represent a portion of the company’s net income.
Dividends
Gain or increase in value in a company’s share price.
Capital Appreciation
Total claim on asset.
Shareholder’s Equity
What are earnings that are kept within a company?
Retained Earnings
Are inflows positive or negative?
Positive, as it is money going into the business.
Investing Activities include:
Proceeds/purchase of property, plant, and equipment.
Inflows from sales and outflows from payment of expense affects which business activity?
Operating Activity
Payments of dividends and issuance of shares affect which business activity?
Financing Activity
How is profit calculated?
Expense - Income
The one-year period that represents a company’s operating year.
Fiscal Year
Net assets of a company:
Equity
How soon something will be received/paid:
Liquidity.
Funds that are available for use in the company:
Working Capital
What is the Accounting Equation?
Assets = Liability + S/H Equity
What has probable future benefits?
Assets
Current assets - Liability = ?
Working Capital
If something will not be received or paid within 12 months from the fiscal year end, it is:
Non-Current
Liabilities have probable future ____:
Sacrifice (or expense)
Cash, investments, accounts receivable, inventory, and prepaid expense are examples of:
Current Assets
Present / past obligations are:
Liabilities
Notes payable, deferred income taxes, and long-term debt are examples of:
Non-current Liabilities
What is included in a Statement of Financial Position?
Assets, Liability, and S/H Equity
All transactions, regardless of their nature, must be recorded when they occur.
Incurred
