Concepts Ch 2 Flashcards
Income Statement Formats
Single Step (1 Group Rev & 1 Group Exp)
Multi-Step (Inc/Exp Op & Inc/Exp Non-Ops)
Condensed (Most Common)
OCI Includes
Unrealized Gain Securities AFS
Foreign Currency Translation ADJ
Funded Status Pension
Current Assets
Cash or Other Resources expected to be realized in cash during normal op cycle
Operation Cycle
1 year or longer
Non-Current Assets
Do not qualify as current assets
PPE
Land, buildings, equipment
Current Liabilities
Obligation expected to be liquidated with current assets or other current liabilities
Advertising expnese
Occurs when 1st incurred or when advertising 1st begins
Balance Sheet Can be used for
help users assess
1) liquidity
2) Financial flexibility
3) profitability
4) Risk
General and Admin Expenses
are incurred for the entity as a whole and are not related to a specific function
Under US GAAP a currently is classified as non-current if
1) intends to refinance
2) demonstrates ability to refinance
Income tax expense/benefit is allocated to
1) continuing operarions
2) discountinued operations
3) OCI
4) Items debited or credited to sh equity
Current Assets include
1) Cash/Cash equiv
2) Certain individual trading, AFS, and HTM
3) receivables
4 ) Inventory
5) PP Exp
6) Certain investment in equity securities
Material event that is unusual and or infrequent must be reported
as a separate component of income from continue ops not net of taxes
Freight-out
is included in selling expenses
The results of operations for a period of time are reported on
income statement
If an entity has not OCI
It need not report OCI or comprehensive income
OCI Must be reported in
1) one continuous statement or
2) Two separate but consecutive statements
One continuous statement has
Two sections - (net income and OCI)
1) Total net income with its components
2) A total of OCI with it components
3) Total Comprehensive Income
Two Consecutive statements has
1st statement must persent the components of net income and total net income
2nd statement must be presented immediately after the first
1) The components of OCI
2) Total OCI
3) Total comprehensive incomme
