FA Chapter 2 Flashcards
1
Q
Define: Financial Reporting
A
To provide useful economic information to external users for decision making and for assessing future cash flows.
2
Q
Relevancy
A
predictive value,
feedback value, and timeliness.
3
Q
Reliability
A
verifiability,
representational faithfulness,
and neutrality
4
Q
Comparability
A
across companies.
5
Q
Consistency
A
over time.
6
Q
Asset
A
economic resource with
probable future benefits.
7
Q
Liability
A
probable future sacrifices of
economic resources.
8
Q
Stockholders’ Equity
A
financing
provided by owners and business operations.
9
Q
Revenue
A
increase in assets or
settlement of liabilities from ongoing operations.
10
Q
Expense
A
decrease in assets or
increase in liabilities from ongoing operations.
11
Q
Gain
A
increase in assets or settlement
of liabilities from peripheral activities.
12
Q
Loss
A
decrease in assets or
increase in liabilities from peripheral activities.
13
Q
Historical Cost
A
cost is measured on the date of the transaction as the cash paid plus the dollar value of all non cash considerations.
14
Q
UNEARNED REVENUE IS A
A
Liability
15
Q
PREPAID EXPENSE IS ALWAYS AN
A
Asset
