Chapter 7 Flashcards
Publicly traded corporations are generally required to have an annual independent audit of their financial records. What do the opinions mean under GAAP?
An unqualified or “clean” opinion is the best type of report a business can get.
The term qualified means that the auditor has some reservations about the information contained in the financial statements.
An adverse opinion means the auditor is not willing to vouch for the accuracy of the information.
The total of the cash from operations, investing, and financing, as reported on the statement of cash flows, ..
is the net change in the cash position of the firm for the reporting period. The sum total, or the net change in cash, is not reported on either the balance sheet or the income statement. It is the sum total of the entries on the statement of cash flows, which is a separate financial statement.
investing activities vs financing activities
All financing activities deal with the flow of cash to or from the business owners.
The sale of XYZ Lathe Manufacturing bonds. The purchase of a new computer-driven lathe. The purchase of a new building to store inventory. All examples of investing activities.
