Chapter 2 Flashcards
What is a financial statement?
Communicates information about an entity’s financial situation and performance.
What standards are used for public companies?
International Financial Reporting Standards (IFRS).
What standards are used for private companies?
Accounting Standards for Private Enterprises (ASPE).
What is the main difference between accounting and finance?
Accounting looks at past financial results while finance looks at future cash flows and market values.
What is a Statement of Financial Position?
Also known as the Balance sheet, is a snapshot of the firm’s assets and liabilities at a given point in time.
What is market value?
Price at which assets, liabilities, or equity can actually be bought or sold.
What is a Statement of Comprehensive Income?
Also known as the Income statement, it illustrates the financial performance of a firm over a period of time.
What is accrual accounting?
Records the revenue and expenses in the period to which they relate (matching principle).
What is the Statement of Cash Flows (SCF)?
Provides information on cash flowing to and from the entity over the fiscal period.
What are marginal tax rates?
Percentage paid on the next dollar earned .
What are average tax rates?
Total income tax payable / income before tax (corporate tax).
What is Capital Cost Allowance (CCA)?
Capital asset acquired by a company can receive a deduction for tax each year while that asset issued in the business.
