FABM Flashcards
shows the business’s assets, liabilities, and equity as of the reoprt date
Statement of Financial Position
refer to the financial statements compiled by accountants for the company’s annual reports
Financial Reports
reports the business’s revenues, expenses, gains, and losses for the reporting period
Statement of Income and Expenses / Statement of Comprehensive Income
present the changes in the owner’s capital or shareholder’s equity during the accounting period. It shows changes caused by net income, dividends, sales and purchases of stocks.
Statement of Changes in Equity
exhibits the summary of the inflow and outflow of cash and cash equivalents during the reporting period
Statement of Cash Flows
presents additional information and explanation about the business’s financial statements. It explains the resulting numbers and figures like depreciation and valuation of assets and includes significant accounting policies
Notes to Financial Statements
assesses the company’s profitability and liquidity every month in order to make more efficient operating and financing decisions.
Management Team
evaluate companies’ financial performance in order to decide which securities to recommend to their clients
Investment Analysis
gauge the ability of the company to compensate its employees and give the benefits to union members
employees and unions
measure borrower’s capability to pay back the loan and all additional charges and interest
lenders
examine if the company is capable to pay the items they are ordering
suppliers
select a supplier that will be able to remain in business in the long run
customers
evaluate each other’s financial condition and adjust competitive strategies accordingly
Competitors
statement of financial position is previously called the _____
balance sheet
Accounting Equation for Statement of Financial Position
Assets = Liabilities + (Owner’s Equity - Dividends + Revenue -Expenses)
increase when debited and decreased when credited
debits
increase when credited and decrease when debited
credits
an economic resource presently held by the company. This is a right acquired by the company from past transactions to produce economic benefits
assets
the asset is cash or cash equivalent and is not restricted from being used for at least twelve months after the reporting period
current asset
includes coins, currency, checks, money orders, bank deposits, and drafts
Cash
short-term instruments that are readily convertible to cash
Cash Equivalents
promises to pay a certain amount of money on a certain date written by customers
notes receivable
claims against customers for their purchases that are made on credit. less secured than promissory note
accounts receivable
raw materials, supplies, goods placed in process, and finished goods available for sale
inventories
future expenses like rent and insurance that are paid in advance
Prepaid expenses
resources with useful lives of more than twelve months that can be used to benefit the company beyond the current period
Noncurrent asset
tangible assets used in operating and administrative purposes. these include land, building, vehicles, machinery, equipment, furniture and fixtures that are expected to be used for more than one period
property, plant, and equipment
the sum of the periodic depreciation charges. this is deducted from the cost of the related asset to get its book value
accumulated depreciation
assets held “for the accretion of wealth through capital distribution, such as interest, royalties, dividends and rentals, for capital appreciation, etc.
long-term investments
nonmonetary assets that are identifiable because they do not have physical bodies. (patent, franchise, copyright, trademark)
intangible assets
exist when one party has an obligation to transfer an economic resource or give economic benefits to another party
liability
a duty or a responsibility to do or not to do something. this could be the result of a contract, agreement, legislation, policy, practice.
obligation
