CHAPTER 4 Flashcards
what is a classified balance sheet?
organizes the asset and liabilty accounts into categories
what are current assets?
resources that the entity expects to convert to cash or to consume during the next year or within the operating cycle of the entity
what are examples of current assets?
cash, short term investments, accounts recievable, notes recevieble. merchanside inventory expected to be sold within the year, prepaid expenses that will expire in the next year, supplies on hand at the end of the accounting year
how are current assets listed on the balance sheet?
they are reported before non current assets and are listed by decreasing levels of liquidity+
what are non current assets?
assets that will useful for more than one year ( sometimes referred to as long lived assets)
what are some examples of non current assets?
property, plant and equipment, long term investments, intangible assets
what are examples of current liabilities?
bank loans, accounts payable, accrued liabilities, unearned revenue, the current portion of long term liabilities, unearned revenue, income taxes payable
what is the current portion of long term liabilities?
the principal amount of a long term liability that is to be paid within the next 12 months
what is an example of a long term liability?
a morgate
what is an account form balance sheet?
where liabilites and equities are presented to the right of the assets
what are notes to the financial statement?
provides relevant details that are not included in the body of the financial statements
what is an audit?
an external examination of a companys financial statement information and its system of internal controls
what are internal controls?
the processes instituted by managment of a company to direct, monitor and measure the accomplisment of its objectives
what is an unqualified auditors report?
indicates that the financial statements are truthful
what is a qualified auditors report?
indicates the financial statements are not or may not be truthful
