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CFAS > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

info of basic FS (nature)

A

simple and complex

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2
Q

structured representation of the P and Fperf of an entity

A

Financial Statements

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3
Q

FP of an entity; as of a given reporting date; contains asset, liab and equity

A

SFP

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4
Q

for a given reporting period; contains profit or loss and OCI

A

SCI

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5
Q

historical changes in cash and cash equivalents; during a reporting period

A

SCF

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6
Q

changes in equity & PnL, OCI and transactions with owners of the enterprise

A

SCOE

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7
Q

accounting policies adopted; schedules to support the balances; other info relevant to the user & is not appropriately presented on the face

A

Notes to FS

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8
Q

FS portrays

A

economic activities, result of the economic act, and representation of the company’s management

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9
Q

specific principles, bases, conventions, rules and practices applied by an entity in preparing FS; should be in compliance with the FR framework

A

Accounting Policies

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10
Q

FS, except SCF, are presented applying the accrual basis

A

True

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11
Q

balance sheet; as of a given date, ALOE

A

Statement of Financial Position

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12
Q

formal presentation of the accounting equation

A

SFP

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13
Q

PAS 1: Presentation of FS (A&L) - How?

A

(1) current and non-current and (2) liquidity

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14
Q

characteristics of current assets

A

to be realized, intended for sale/consumption in the entity’s NOC, purpose of trading and realized within 12 mos after RP, and cash and CE, unless restricted from being exchanged/used to settle a liab at least 12 mos from end of RP

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15
Q

presumed to be unrestricted

A

Cash

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16
Q

it is realized in the entity’s NOC

A

Trade Receivables (Notes and Accounts)

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17
Q

sold in the entity’s NOC

A

Inventories

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18
Q

consumed in the entity’s NOC

A

Prepaid Expenses

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19
Q

purpose of trading

A

Financial Asset at FV through PnL

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20
Q

investment in shares of stock; inv in debt insurance of other entities

A

FVTPL

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21
Q

dividends receivable, interest receivable, advances to officers due currently and realized within 12 mos after the RP

A

Non-trade receivable collectible within 12 mos

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22
Q

characteristics of current liab

A

settled in the entity’s NOC, purpose of trading, due to be settled within 12 mos after RP, does not have an unconditional right to defer the settlement of liab for at least 12 mos after RP

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23
Q

settled in NOC

A

Trade Payable (Accounts and Notes)

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24
Q

settled in NOC

A

Accrued Expenses

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25
Q

settled within 12 mos after RP

A

Dividends Payable

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26
Q

earned within the NOC

A

Unearned Revenues

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27
Q

does not have an unconditional right to postpone settlement of obli

A

Long term notes payable due within 12 mos, maturity date is extended for 5 years from OG

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28
Q

land, building, equipment, furniture & fixtures, and tools

A

PPE

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29
Q

patents, franchise, trademarks, and customer list

A

Intangible Asset

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30
Q

land & building held for appreciation in value and rental

A

Investment Property

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31
Q

long-term advances to officers and key employees and non-trade receivables (collectible after 12 mos)

A

Fin. A not expected to be realized in cash in the entity’s NOC or within 12 mos after RP

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32
Q

due beyond 12 mos from end of RP

A

Long-term Notes Payable

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33
Q

due beyond 12 mos after RP

A

Bonds Payable

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34
Q

due within 12 mos after RP but term is extended on a long-term basis and negotiation is completed before the end of RP

A

Long-Term Notes Payable

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35
Q

presentation depends on the form of bus org according to ownership

A

Equity

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36
Q

capital account of the proprietor and balance of the sum of cap & drawing accounts (drawing are not permanently transferred to cap) and each partner’s equity is presented separately

A

SFP - sole proprietorship & partnership

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37
Q

according to source

A

SFP - corporation

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38
Q

contributed capital, retained earnings, cumulative OCI

A

SHE

39
Q

share capital = ordinary and preference share

A

Contributed Capital

40
Q

cc in excess of the legal capital

A

Share Premium/Add Contributed Capital

41
Q

cumulative profits earned - dividends declared

A

Retained Earnings

42
Q

change in equity arising from non-owner transactions that do not pass through PnL but are taken to OCI

A

Cumulative OCI

43
Q

revaluation surplus, unrealized G/L, FOREX translation G/L, actuarial G/L on defined benefit employee retirement plans

A

Cumulative OCI

44
Q

3 forms of SFP

A

account form, report form and financial position form

45
Q

big T-account; assets (left) and liab & equity (right)

A

Account Form

46
Q

continuous format of presenting all 3 elements

A

Report Form

47
Q

it emphasizes the working capital (net assets = equity)

A

Financial Position Form

48
Q

Working Capital

A

current assets - current liabilities

49
Q

performance of an entity; for a given RP; income and expenses

A

SCI

50
Q

PnL section (income statement); OCI

A

Fin. Perf of an entity

51
Q

2 forms of SCI

A

one statement form and two-statement form

52
Q

PNL and OCI

A

One Statement Form

53
Q

1 statement for PNL and 1 statement for OCI (PNL -1st and OCI)

A

Two-Statement Form

54
Q

merchandising/manufacturing; COGS, selling/marketing, GenAd and other OPEX

A

Function of Expense Method

55
Q

service; presented based on account names in edger; salaries, supplies, insurance, depreciation, amortization and OPEX

A

Nature of Expense Method

56
Q

2 forms of Expenses

A

function of expense method and nature of expense method

57
Q

inflows & outflows of C & CE

A

SCF

58
Q

3 kinds of activities in SCF

A

operating, investing and financing

59
Q

short-term placement of cash; time deposits maturing within 90 days/less; debt securities maturing 90 days/less from date of acquisition

A

Cash Equivalents

60
Q

determination of income in PnL; collections from customers

A

Operating Activities

61
Q

payment to suppliers, payment to employees for wages and salaries, payment to gov for taxes and payment to lenders for interest

A

Operating Activities

62
Q

transactions affecting assets not normally identified with normal operating cycle

A

Investing Activities

63
Q

earnings per share are required: basic and diluted

A

Large/Publicly accountable entities

64
Q

profit earned by a holder of 1 OSC

A

Earnings per Share

65
Q

profit is reduced by?

A

PS if cumulative and PS is non-cumulative

66
Q

whether PS is declared or not

A

Cumulative

67
Q

div on PS that has been declared during the period

A

Non-cumulative

68
Q

profit only in the numerator excluding the OCI

A

True

69
Q

granting of non-trade loans & collecting them; acquiring and disposing inv in non-current fin assets; acquiring and disposing PPE and intangible assets

A

Investing Activities

70
Q

non-trade liab and SHE; payment of dividends; issuance of debt; issuance of share capital

A

Financing Activities

71
Q

repayment of settlement of debt obligations; purchase of treasury shares

A

Financial Assets

72
Q

non-cash act that significantly affect assets & liab are not presented on the face but on the notes

A

True

73
Q

2 methods of presenting CF

A

direct and indirect method (provided that presentation is consistent from one period to another)

74
Q

enumerates major classes of gross operating cash receipts and payments

A

Direct Method

75
Q

made based on income statement accounts and changes in account balances in SFP

A

Reconstructions

76
Q

reconciling PNL before income tax to operating cash flows

A

Indirect Method

77
Q

income and expenses not involving cash receipts and cash payments

A

Adjustments

78
Q

movement of each equity component during a RP; one column for each equity component; beg balance of each equity account is reconciled to the end balance

A

SCOE

79
Q

elements of notes to FS

A

basis for presentation of FS, supporting sched for line items presented on the face, and other disclosures

80
Q

Basis for presentation of FS

A

summary of significant acco policies

81
Q

Supporting sched for line items presented on the face

A

details of the balance of inventories, PPE and intangible assets

82
Q

contingent liabilities; contractual commitments; events after the RP (relevant)

A

Other disclosures

83
Q

affect the amounts or classification of elements; required additional info to be presented in the notes

A

Effect of events after the RP

84
Q

events, favorable & unfavorable, that occur bet the end of the RP and the date when the FS are authorized for issue

A

Events after the RP

85
Q

management of the enterprise approves and authorizes the issue of the FS

A

Date of Issuance

86
Q

BoD authorizes the FS

A

Corporate form of org

87
Q

2 types of events after RP

A

adjusting and non-adjusting events

88
Q

conditions that existed at the end of RP

A

Adjusting Events

89
Q

indicate of conditions that arose after the RP

A

Non-Adjusting Events

90
Q

reclassify the info and recognize a FS element that was not previously recognized

A

Adjusting Events

91
Q

related to a condition different from the condition as of the RP

A

Non-Adjusting Events

92
Q

may be ignored if not considered significant and will not affect the evaluation of the user

A

Non-Adjusting Events

93
Q

material & non-disclosure could influence the economic decision of the users = disclosed (nature and estimate)

A

Non-Adjusting Events

CFAS (4 decks)

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