Final Flashcards
Which cash flow is directly related to earning income?
Operating
Which cash flow is from the (1) purchase or sale of plants, equipment, and (2) investments?
Investing
Which cash flow is from to investors and creditors?
Financing
What are the steps to find statement of cash flows?
Find the change, classify the B/S, Operating CF, Investing CF, Financing CF, and Final Check
What B/S items belong on the operating section?
Current assets and current liabilites
What B/S items belong on the investing section?
Long term assets
What B/S items belong on the financing section?
Long term liabilities and stockholders’ equity
How do you start the Indirect Method?
(1) Start with income. (2) Add depreciation and amortization expense. (3) Subtract gain on sale or add loss on sale. (4) Subtract/Add operating assets/liabilities.
Change in Accounts Receivable is…
Operating asset
Change in Inventories is…
Operating asset
Change in Prepaid Expenses is…
Operating asset
Change in Accounts Payable is…
Operating liability
Change in Accrued Expenses is…
Operating liability
Increase in CA…
Subtract
Decrease in CA…
Add
Increase in CL…
Add
Decrease in CL…
Subtract
Which method of accounting records income when you receive it and records an expense when you pay it?
Cash Accounting
Which method of accounting records income when you earn it and records an expense when you incur it?
Accrual Accounting
When should revenue be recognized?
When it’s realized and earned
What accounts are found on an income statement?
Revenue, expenses, gains, losses, net income
What accounts are found on a Balance Sheet?
Assets, liabilities, and equity
Total amount of money that a company has billed to its customers.
Gross accounts receivable
Amount of money that a company expects to receive after deducting and AFDA.
Net account receivable
The amount that a company’s assets are depreciated for a single period.
Depreciation expense
The total amount that a company has depreciated its asset to date.
Accumulated depreciation
An accounting charge that companies record when goodwill’s carrying value exceeds its fair value.
Goodwill
What are the components of the Stockholders Equity?
Outstanding shares, APIC, retained earnings, and treasury stock
The difference between the par value of a stock and the price that investors actually pay for it.
APIC
(cost - residual value) * 1 / useful life
straight-line method
2 * (cost - accumulated depreciation) / useful life
double-declining method
ending inventory
beginning inventory + purchases - COGS
gross profit
total revenue - COGS
