Chapter 2 - Financial Statements Flashcards
What are the 2 components of accounting? (FM)
- Financial accounting
2. Management accounting
The purpose of “financial accounting” is to _______
Disclose financial information (general purpose accounting)
General purpose accounting is to ______
Disclose information to investors in general
“Income statement” is also known as _______
“Profit and Loss” (P/L)
Balance sheet and Income statement are based on _____ basis
Accrual
Statement of cash flows is based on _____ basis
Cash
What are the 5 types of “assets”? (CLPIO)
- Current assets
- Long-term assets (investments)
- Property, Plant, and Equipment (PPE)
- Intangible assets
- Other assets
What are 11 types of “current assets”? (CSALNAFWRPD)
- Cash/cash equivalents
- Short-term investments (trading, AFS)
- Accounts receivable
- Less allowance for doubtful account
- Notes receivable
- Advances to suppliers
- Finished goods
- Work-in-progress
- Raw materials
- Prepaid expenses
- Deferred tax assets
What are the 3 types of “long-term assets”? (ILI)
- Investment in securities (AFS or HTM)
- Land held for future plant site
- Investment in special funds
What are the 6 types of PPE? (LBELLL)
- Land
- Building
- Equipment/machinery
- Leased assets (capital lease)
- Leasehold improvements
- Less: Accumulated depreciation
What are the 2 types of “intangible assets”? (GP)
- Goodwill (net of amortization)
2. Patents (net of amortization)
What are the 4 types of “other assets”? (NLPD)
- Non-current receivable
- Long-term prepaid expense
- Property for sale
- Deferred tax assets
What are the 2 types of “liabilities”? (CN)
- Current liabilities
2. Non-current liabilities
What are the 9 types of “current liabilities”? (ANISIAUDC)
- Accounts payable
- Notes payable
- Interest payable
- Salaries payable
- Income tax payable
- Advances from customers
- Unearned revenue
- Deferred tax liabilities
- Current portion of long-term debt
What are the 7 types of “non-current liabilities”? (BPLDCPA)
- Bonds payable
- Plus: Unamortized premium on bond
- Less: Unamortized discount on bond
- Deferred tax liabilities
- Capital lease liabilities
- Pension plan liabilities
- Accrued warranty
What are the 4 types of “shareholders’ equity”? (PRAT)
- Paid in capital
- Retained earnings
- Accumulated other comprehensive income (AOCI)
- Treasury stock at cost
What are the 2 types of “paid in capital”? (CA)
- Capital stock
2. Additional paid-in capital
What are the 2 types “capital stock”? (PC)
- Preferred stock
2. Common stock
What are the 5 types of “additional paid in capital”? (PCTSS)
(From)
- Preferred stock
- Common stock
- Treasury stock
- Stock option
- Stock warrant
What are the 2 types of “retained earnings”? (AU)
- Appropriated
2. Un-appropriated
What are the 6 accounts reported in a “statement of cash flows”? (OIFNBE)
(Cash flows from…)
- Operating activities
- Investing activities
- Financing activities
- —- - Net increase in cash/cash equivalents
- Beginning cash/cash equivalents
- Ending cash/cash equivalents
What are the two accounts reported in “cash flows from operating activities (CFO)”? (NA)
- Net income
2. Adjustment of non-cash & non-operating activities
What are the 8 accounts under “adjustment of non-cash & non-cash operating activities”? (DELAIAND)
- Depreciation
- Equity in income
- Loss on sale of equipment
- Accounts receivable (net)
- Inventory
- Accounts payable and accrued expenses
- Notes payable
- Deferred tax liability
What are the 2 accounts under “cash flow from investing activities (CFI)”? (EES)
(Purchase of…)
- Equipment
- Securities
