Financial Staments

Question 1

Income Statement/Stmt of Profit and loss

Answer 1

1-measures preformance for the period (for ye dec xxxx)
2-apply the All Inclusive approach-except prior period adj/which are included in Stmt of Retained Earnings
3-include in comphensive income stms but not in net incoe are
-unrealized gains and losses on avbl for sale securities,
-pension cost adj
-and foreign currency translation adj
-Deferrals of certain gains or losses on Hedge acct

Question 2

Stmt of Comprehensive Income

Answer 2

1-Reports non owner changes in equity at the same period of the IS and dated the same as IS
2-Includes NI of Loss and items incl in CIS that are not part of net income.

Question 3

Balance Sheet-Stmt of Financial Position

Answer 3

1.- disclose the resources at a point in time (Dec 31,xxx)
2.-Disclose its economic resourses
3.- Formats for presentation
-Account Format:left Asst right Liab and OE
A=L+OE
-Report Format most popular listed from top to bottom

Question 4

Assets

Answer 4

in order of decreasing Liquidity, the most liquid to least PPE

Question 5

Liabilities

Answer 5

In order of maturity. Current first then log term libl

Question 6

Owner’s Equity

Answer 6

In order of permanence

Question 7

Valuation and Measurement

Answer 7

1- PP&E, Intangibles=Historical cost and Depc Amortz Historical cost
2- Receivables = NRV
3-Inventory= Lower of cost or Market
4- Investments in Marketable Securities = MktV
5- Liabilities+ Present value
6- owner’s equity = Historical Value of Cash Inflows and Residual Valuation

Question 8

Stmt of Stockholder’s equity

Answer 8

Presents chnges in owners'equity over a period of time
Changes in 
-Contributed capital
-Addtl paid in capital
-Retained earnins

Question 9

Stmt of Cash flows

Answer 9

purpose: explain the change in $ and $ equiv ocurred during the past accounting year.
Classified in 3 cat:
Operating: IS transactions
Investing and financing

Question 10

Cash Equivalents

Answer 10

Short term Investments that are convertible into known and fix amt of $
and matures fo the purchaser in three months or less

Question 11

Operating CF

Answer 11

IS transactions:Inflows recept from cust and int. Outflows Pymt to suppliers, emplyers and tax

Question 12

Investing CF

Answer 12

acquisition and disposal of long term asst and inv
Outflows Purch of Plant assets and Invt
Inflows proceeds from the sale of these items

Question 13

financing

Answer 13

CF related to liablt and OE of the bs
Inflows issuing debt and equity securities
Outflows retiment of debt and equity sect and div pymt

Question 14

Prior period adj

Answer 14

Stmt of RE ad adj to the beg bal in the year error is discv