CMA1 Financial Statements Flashcards by Paul Wicklund

Q

Which financial statement and category does this item belong to?
Cash

A

Statement of Financial Position (Balance Sheet)

Current Assets

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Q

Which financial statement and category does this item belong to?
Marketable Securities (stock, bonds, etc.)

A

Statement of Financial Position (Balance Sheet)

Current Assets

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Q

Which financial statement and category does this item belong to?
Accounts Receivable (Trade Receivables)

A

Statement of Financial Position (Balance Sheet)

Current Assets

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Q

Which financial statement and category does this item belong to?
Prepaid Expenses

A

Statement of Financial Position (Balance Sheet)

Current Assets

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Q

Which financial statement and category does this item belong to?
Inventory

A

Statement of Financial Position (Balance Sheet)

Current Assets

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Q

Which financial statement and category does this item belong to?
Restricted Cash (refundable deposits, minimum bank balances, funds in escrow)

A

Statement of Financial Position

Non-current Assets / Long-term Assets

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Q

Which financial statement and category does this item belong to?
Long-term Receivables (such as a loan not repayable for 14 months)

A

Statement of Financial Position

Non-current Assets

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Q

Which financial statement and category does this item belong to?
Long-term Investments (stock you don’t intend to trade, ownership of other businesses, etc.)

A

Statement of Financial Position (Balance Sheet)

Non-current Assets

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Q

Which financial statement and category does this item belong to?
Property, Plant, and Equipment (PPE)

A

Statement of Financial Position (Balance Sheet)

Non-current Assets

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Q

Which financial statement and category does this item belong to?
Intangible Assets (Goodwill, customer lists, trademarks, etc.)

A

Statement of Financial Position (Balance Sheet)

Non-current Assets

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Q

Which financial statement and category does this item belong to?
Accounts Payable / Trade Payable

A

Statement of Financial Position (Balance Sheet)

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Unearned Revenue / Deferred Revenue

A

Statement of Financial Position (Balance Sheet)

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Accrued Interest (interest that has been incurred as of a specific date but has not been paid out)

A

Statement of Financial Position (Balance Sheet)

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Short-term notes payable

A

Statement of Financial Position (Balance Sheet)

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Agency Obligations

A

Statement of Financial Position (Balance Sheet)

Current liabilities

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Q

Which financial statement and category does this item belong to?
Dividends payable

A

Statement of Financial Position

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Current portion of long-term debt (due within 12 months)

A

Statement of Financial Position (Balance Sheet)

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Callable long-term debt

A

Statement of Financial Position

Current Liabilities

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Q

Which financial statement and category does this item belong to?
Long-term notes payable (bank loans)

A

Statement of Financial Position (Balance Sheet)

Non-current liabilities

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Q

Which financial statement and category does this item belong to?
Long-term bonds payable

A

Statement of Financial Position (Balance Sheet)

Non-current Liabilities

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Q

Which financial statement and category does this item belong to?
Non-current liabilities under capital or finance leases

A

Statement of Financial Position (Balance Sheet)

Non-current Liabilities

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Q

Which financial statement and category does this item belong to?
Post-retirement benefit obligations

A

Statement of Financial Position (Balance Sheet)

Non-current Liabilities

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Q

Which financial statement and category does this item belong to?
Long-term deferred tax liabilities

A

Statement of Financial Position (Balance Sheet)

Non-current liabilities

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Q

Which financial statement and category does this item belong to?
Obligations under product or service warranty agreements

A

Statement of Financial Position (Balance Sheet)

Non-current Liabilities

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Which financial statement and category does this item belong to? Long-term deposits from a customer

Statement of Financial Position (Balance Sheet) | Non-current liabilities

Formula for the Statement of Financial Position (Balance Sheet)

Assets = Liabilities + Owners Equity

Which statement contains permanent or real accounts and what does that mean?

Statement of Financial Position (Balance Sheet), accounts on this statement will never close out, like they do on the Income statement.

What is the formula for a single-step Statement of Earnings (Income Statement)?

Revenue - Expenses = Net Income

What is the formula for a multi-step Statement of Earnings (Income Statement)?

Net Income = Revenue - Expenses + Gains - Losses

Which financial statement and category does this item belong to? Sales revenue from normal business operations

Statement of Earnings (Income Statement) | Revenue

Which financial statement and category does this item belong to? service revenue from normal business operations

Statement of Earnings (Income Statement) | Revenue

Which financial statement and category does this item belong to? Subscription revenue from normal business operations

Statement of Earnings (Income Statement) | Revenue

Which financial statement and category does this item belong to? revenue from rentals (apartment company collecting rent)

Statement of Earnings (Income Statement) | Revenue

Which financial statement and category does this item belong to? Commission earned in normal business operations

Statement of Earnings (Income Statement) | Revenue

Which financial statement and category does this item belong to? Cost of Goods Sold

Statement of Earnings (Income Statement) | Expenses

Which financial statement and category does this item belong to? Selling Expenses

Statement of Earnings (Income Statement) | Expenses

Which financial statement and category does this item belong to? General and Administrative Expenses

Statement of Earnings (Income Statement) | Expenses

Which financial statement and category does this item belong to? Research and Development

Statement of Earnings (Income Statement) | Expenses

Which financial statement and category does this item belong to? Interest expense

Statement of earnings (Income Statement) | Expense

Which financial statement and category does this item belong to? Income Tax Expense

Statement of Earnings (Income Statement) | Expense

Which financial statement and category does this item belong to? Gain or Loss on Fixed Asset

Statement of Earnings (Income Statement) | Reported separately as a gain or loss

Which financial statement and category does this item belong to? Gain or loss on sale of securities

Statement of Earnings (Income Statement | Reported separately at the bottom as a gain or loss

Which financial statement and category does this item belong to? Gain or loss from discontinued operations

Statement of Earnings (Income Statement) | reported separately as a gain or loss

Which financial statement and category does this item belong to? Net Income

Statement of Earnings (Income Statement) | Total

What is the formula for Comprehensive Income?

Comprehensive income = Net Income + Other Comprehensive Income

Which financial statement and category does this item belong to? Foreign currency translation gains and losses

Statement of Comprehensive Income or at the bottom of the Income Statement Other Comprehensive Income (OCI)

Which financial statement and category does this item belong to? Defined benefit pension plan gains and losses

Statement of Comprehensive Income or at the bottom of the Income Statement Other Comprehensive Income (OCI)

Which financial statement and category does this item belong to? Unrealized investment holding gains and losses for available-for-sale securities

Statement of Comprehensive Income or at the bottom of the Income Statement Other Comprehensive Income (OCI)

Which financial statement and category does this item belong to? The "effective" portion of a change in fair value of a cash flow hedge derivative

Statement of Comprehensive Income or at the bottom of the Income Statement Other Comprehensive Income (OCI)

What are the three categories on the Statement of Cash Flows?

``` Operating Activities (CFO) Investing Activities (CFI) Financing Activities (CFF) ``` The total from all 3 is the change in cash from one period to the next.

Which financial statement and category does this item belong to? cash collections or receipts from customers

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Cash proceeds from the sale of trading securities

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Interest received from debt instruments

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Dividends received from equity investments

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Cash payments to suppliers

Statement of cash flows | Operating activities

Which financial statement and category does this item belong to? Cash payments to employee salaries

Statement of cash flows | Operating Activities

Which financial statement and category does this item belong to? Cash paid for other expenses

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Purchase of held-for-trading securities

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Interest paid on debt (such as interest paid to bond holders)

Statement of cash flows | Operating Activities

Which financial statement and category does this item belong to? Taxes paid

Statement of cash flows | Operating Activities

Which financial statement and category does this item belong to? Interest received

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Interest paid

Statement of Cash Flows | Operating Activities

Which financial statement and category does this item belong to? Dividends received

Statement of cash flows | Operating Activities

Which financial statement and category does this item belong to? Purchase or sale of property, plant, equipment

Statement of Cash Flows | Investing Activities

Which financial statement and category does this item belong to? Purchase or sale of investment in debt securities

Statement of Cash Flows | Investing Activities

Which financial statement and category does this item belong to? Purchase or sale of investment in equity securities

Statement of Cash Flows | Investing Activities

Which financial statement and category does this item belong to? Collection of loans made to others

Statement of Cash Flows | Investing Activities

Which financial statement and category does this item belong to? Granting of loans made to others

Statement of Cash Flows | Investing Activities

Which financial statement and category does this item belong to? proceeds from issuance of debt

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Proceeds from the issuance of capital stock

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Proceeds from the issuance of Treasury stock

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Principal payments on debt

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Payment for the acquisition of the company's stock

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Dividends paid in cash to shareholders

Statement of Cash Flows | Financing Activities

Which financial statement and category does this item belong to? Number of shares of common or preferred stock

Statement of Changes in Stockholders Equity

Which financial statement and category does this item belong to? Additional paid-in-capital (APIC)

Statement of Chagnes in Stockholders Equity

Which financial statement and category does this item belong to? Retained Earnings

Statement of Changes in Stockholders Equity

Which financial statement and category does this item belong to? Accumulated Other Comprehensive Income

Statement of Stockholders Equity

Which financial statement and category does this item belong to? Treasury Stock

Statement of Changes in Stockholders Equity

Which financial statement and category does this item belong to? Non-controlling Interest

Statement of Changes in Stockholders Equity

What are some limitations of the Financial Statements?

- Not all purpose - Qualitative information may also be relevant, but the statements mostly show quantitative information - Based on estimates and judgements, may not be accounting accurate - Reported at historical cost (not fair value) - Periodic in nature - Going-concern assumption (assumes the company may continue their business)

What are some limitations of the Balance Sheet?

Does not represent the value of a business enterprise Reported at historical cost Includes quantifiable assets only

What are some limitations of the Income Statement?

Uses accrual accounting Includes Quantifiable revenue and expenses only Use of different accounting methods may affect comparability

What are some limitations of the Statement of Cash Flows?

The prevalent use of the indirect method | Changes in cash may not fully reflect all significant transactions, such as those that did not use cash

What are some limitations of the Statement of Changes in Equity?

Statement does not represent the market value of the entity

What are the primary financial statements?

Statement of Financial Position (Balance Sheet) - Assets, Liabilities, Stockholders Equity Statement of Earnings (Income Statement) - Operating income, revenue, expenses, gains/losses, possibly discontinued operations Statement of Comprehensive Income - Can be attached to the bottom of the income statement Statement of Cash Flows - How a company generated and used cash Statement of Changes in Stockholder's Equity - Stock reported, paid in capital, treasury stock, retained earnings

What financial statement and category does this item belong to? Amortization of a bond premium

Statement of Cash Flows Operating Activities The amortizable bond premium is a tax term that refers to the excess price paid for a bond over and above its face value. Depending on the type of bond, the premium can be tax-deductible and amortized over the life of the bond on a pro-rata basis.

What financial statement and category does this item belong to? Purchase of treasury stock

Statement of Cash Flows Financing Activities Treasury stock is shares of the issuing corporation's own stock (common or preferred) that were issued and were later reacquired in the open market by the issuing corporation and are still held by the issuing corporation. Treasury stock is considered issued but not outstanding. It may be obtained through purchase, settlement of an obligation, or donation, and it may be retired or resold. Treasury stock does not carry voting, dividend, preemptive, or liquidation rights. Treasury stock may be accounted for under the par value or the cost method of accounting. Both methods are considered GAAP. Treasury stock is not an asset and does not affect income. It is a contra (negative) element of stockholders' equity—it decreases total equity. Treasury stock may increase or decrease contributed capital and may also decrease (but rarely increases) retained earnings.

What financial statement and category does this item belong to? Payment of cash dividends

Statement of Cash Flows | Financing Activities