Chapter 4 Flashcards
Statement of operations or statement of earnings is used to summarize the profit-generating that occurred during a particular reporting period
Income Statement
Traditional net income plus other non-owner changes in equity
Comprehensive Income
Certain gains and losses that are excluded from the calculation of net income, but included in the calculation of comprehensive income
Other Comprehensive Income/Losses (OCI)
Change statement summarizing the transactions that caused cash to change during the period
Statement of Cash Flows
Revenues, expenses (including income tax), gain, and losses, excluding those related to discontinued operations and extraordinary items
Income from continuing operations
Provision for income taxes; reported as a separate expense in corporate income statements
Income Tax Expense
Comprises revenues, expenses, gains, and losses as measured according to the regulations of the appropriate taxing authority
Taxable Income
Includes revenues and expenses directly related to the principal revenue-generating activities of the company
Operating Income
Includes gains and losses and revenues and expenses related to peripheral or incidental activities of the company
Nonoperating Income
Income statement format that groups all revenues and gains together and all expenses and all losses together
Single-step
Income statement format that includes all number of intermediate subtotals before arriving income from continuing operations
Multi-step
Refers to the ability of reported earnings (income) to predict a company’s future earnings
Earnings Quality
Costs to restore land or other property to its original condition after extraction of the natural respurce ends
Restoration Costs
Associates (allocates) income tax expense (or income tax gross profit net sales benefit if there is a loss) with each major component of income that causes it
Intraperiod Tax Allocation
The discontinuance of a component of an entity whose operations and cash flows can be clearly distinguished from the rest of the entity
Discontinued Operations
Material events and transactions that are both unusual in nature and infrequent in occurrence
Extraordinary Items
Addition to or reduction in the beginning retained earnings balance in a statement of shareholders’ equity due to a correction of an error
Prior Period Adjustment
The amount of income earned by a company expressed on a per share basis
Earnings Per Share (EPS)
Incorporates the dilutive effect of all potential common shares
Diluted EPS
Amount of other comprehensive income accumulated over the current and prior periods
Accumulated Other Comprehensive Income
Inflows and outflows of cash related to transactions entering the determination of net income
Operating Activities
Involve the acquisition and sale of long-term assets used in the business and non-operating investing activities
Investing Activities
Cash inflows and outflows from transactions with creditors and owners
Financing Activities
