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ACC O2 > Financial Statement > Flashcards

Financial Statement Flashcards

1
Q

output of the the financial accounting process

A

Financial Statement

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2
Q

aka “Balance Sheet”

A

Financial Statement

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3
Q

The Financial Statement provides info about the company’s current

A

State of Liquidity, Solvency, Flexibility, and Financial Structure

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4
Q

What are the components of the Statement of Financial Position

A

Asset, Liabilities, and Equities

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5
Q

resources controlled by an entity as a result of past transactions and events and from with future economic benefits are expected

A

Assets

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6
Q

indicates that a company cannot assume authority over the asset before transaction has happened

A

“a result of past transaction and event”

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7
Q

information must be reliable and verifiable

A

Principle of Objectivity

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8
Q

asset could be directly or indirectly contribute to the cash inflows of the entity

A

“future economic benefits”

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9
Q

purchase cost of the asset is used as a fundamental basis for its measurement

A

“reliable basis for the measurement”

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10
Q

2 classifications of Asset

A

Current and Non-current

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11
Q

cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period

A

Current Asset

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12
Q

entity holds this component’s classification primarily for the purpose of trading (selling)

A

Current Asset

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13
Q

accounts should be recorded at its original cost

A

Cost Principle

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14
Q

“set aside for future use”

A

“not restricted”

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15
Q

entity expects to realize ____ within 12 months after the reporting period

A

Current Asset

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16
Q

entity intend to sell or consume ___ within the entity’s normal operating cycle

A

Current Asset

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17
Q

what are the 4 definitions of Current Assets

A
  1. not restricted 12 months after reporting period
  2. used for the purpose of trading (selling)
  3. realized within 12 months after reporting period
  4. intend to sell or consume within entity’s normal operating cycle
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18
Q

the time an entity gives out cash for purchase of their inventory, until they can collect payment from customers after selling the inventory

A

Normal Operating Cycle

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19
Q

5 general accounts of Current Assets

A
  1. Cash and cash equivalents
  2. Trade and other Receivable
  3. Other Short-term investments
  4. Merchandise Inventory
  5. Prepaid Expenses
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20
Q

Cash on Hand

A

Cash

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21
Q

Cash in Bank

A

Cash

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22
Q

Petty Cash Fund

A

Cash

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23
Q

Certificate of Deposit

A

Cash Equivalents

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24
Q

Banker’s Acceptance

A

Cash Equivalents

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25
Q

Commercial Paper

A

Cash Equivalents

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26
Q

Treasury Bills

A

Cash Equivalents

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27
Q

Money Market

A

Cash Equivalents

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28
Q

“realize”

A

is converted to cash

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29
Q

Accounts Receivable

A

Trade and other Receivables

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30
Q

Notes Receivable

A

Trade and other Receivables

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31
Q

Advances to Employees

A

Trade and other Receivables

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32
Q

Accrued Income

A

Trade and other Receivables

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33
Q

Marketable Securities

A

Other Short-term Investments

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34
Q

Prepaid Rent

A

Prepaid Expenses

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35
Q

Prepaid Insurance

A

Prepaid Expenses

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36
Q

Prepaid Advertising

A

Prepaid Expenses

37
Q

Supplies

A

Prepaid Expenses

38
Q

do not meet the criteria for current assets

A

Non-current Assets

39
Q

tangible assets held by an entity for use in production or supply of goods and services, for rental to others, or for administrative purposes, and are expected to be used during more than one period

A

Non-Current Assets - Property, Plant, and Equipment

40
Q

Land

A

Property, Plant, and Equipment

41
Q

Building

A

Property, Plant, and Equipment

42
Q

Machinery

A

Property, Plant, and Equipment

43
Q

Vehicle

A

Property, Plant, and Equipment

44
Q

Equipment

A

Property, Plant, and Equipment

45
Q

Furniture and Fixture

A

Property, Plant, and Equipment

46
Q

asset held by an entity for the accretion of wealth through capital distribution such as interests, royalties, dividends, and rentals

A

Non-current Assets - Long-term Investment

47
Q

the cost of money borrowed from a lender

A

Interest

48
Q

what a lessee pays to a lessor for the use of any rights, copyrights, franchises or any such asset

A

Royalties

49
Q

the distribution of some of a company’s earnings to a class of its shareholders

A

dividend

50
Q

a property lent for a temporary time in exchange for profit

A

rentals

51
Q

identifiable non-monetary asset without physical substance

A

Non-current Asset - Intangible asset

52
Q

type of license that grants a franchisee access to a franchisor’s proprietary business knowledge, processes, and trademarks

A

Franchise

53
Q

an amortizable, intangible asset that grants a business the sole right to manufacture and sell an invention

A

Patent

54
Q

an amortizable, intangible asset that is used to secure the legal right to publish a work of authorship

A

Copyright

55
Q

nonphysical item granting a business the legal right to exclusively use a logo or other item

A

Trademark

56
Q

an intangible asset that accounts for the excess purchase price of another company

A

Goodwill

57
Q

5 sample accounts of Intangible Assets

A

Franchise, Patent, Copyright, Trademark, Goodwill`

58
Q

present obligations of an entity arising from past transactions and events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits

A

Liabilities

59
Q

represented the duty of the company to settle the liability through payment of cash, other assets, or performance of services; company’s capacity to pay

A

“present obligation”

60
Q

outflow of resources embodying economic benefits

A

payment of the obligation should require the company to give up something that has value on its part

61
Q

payment must be from the business and not personally

A

Accounting Principle

62
Q

2 classifications of Liabilities

A

Current and Non-current Liability

63
Q

entity expects to settle the ___ within the entity’s normal operating cycle

A

Current Liabilities

64
Q

entity holds the ___ primarily for the purpose of trading (buying)

A

Current Liabilities

65
Q

the ____ is due to be settled within 12 months after the reporting period

A

Current Liabilites

66
Q

entity does not have unconditional right to defer the settlement of the ____ for at least 12 months after the reporting period

A

Current Liabilites

67
Q

Accounts Payable

A

Current Liabilities - Trade and Other Payables

68
Q

Notes Payable

A

Current Liabilities - Trade and Other Payables

69
Q

Tax Payable

A

Current Liabilities - Trade and Other Payables

70
Q

Loans Payable (12 months or less)

A

Current Liabilities - Trade and Other Payables

71
Q

Advances from Customers

A

Current Liabilities - Trade and Other Payables

72
Q

Accrued Expense

A

Current Liabilities - Trade and Other Payables

73
Q

Unearned Revenue

A

Current Liabilities - Trade and Other Payables

74
Q

7 Accounts of Trade and Other Payables (Current Liabilities)

A
  1. Accounts Payable
  2. Notes Payable
  3. Tax Payable
  4. Loans Payable (12 months or less)
  5. Advances from Customers
  6. Accrued Expense
  7. Unearned Revenue
75
Q

liabilities that do not meet the criteria for current liabilites

A

Non-current Liabilities

76
Q

4 definitions of Current Liabilities

A
  1. entity expects to settle the liability within normal operating cycle
  2. primarily for the purpose of trading (buying)
  3. due to be settled within 12 months after the reporting period
  4. entity does not have unconditional right to the settlement of the liability
77
Q

3 accounts under Non-current Liabilities

A
  1. Mortgage Payable
  2. Loans Payable (more than 12 months)
  3. Bonds Payable
78
Q

the liability of a property owner to pay a loan that is secured by property

A

Mortgage Payable

79
Q

a liability account that contains the amount owed to bond holders by the issuer

A

Bonds Payable

80
Q

the residual interest in the asset of the entity after deducting all of its liabilites

A

Equity or Capital

81
Q

aka Net Assets or Net Worth

A

Equity or Capital

82
Q

Other name of Equity or Capital for Sole Proprietorship

A

Owner’s Equity

83
Q

Other name of Equity or Capital for Partnership

A

Partner’s Equity

84
Q

Other name of Equity or Capital for Corporation

A

Stockholder’s Equity

85
Q

capacity of the company to pay for its currently maturing obligation; the company has enough current assets to settles for its current liabilities

A

Liquidity

86
Q

ability of the company to pay for its long-term obligations

A

Solvency

87
Q

shows the composition of the claims over the assets of the company; provides insights whether the assets of the company are financed more from creditors or the company’s equity

A

Financial Structure

88
Q

shows insights as to the capacity of the company to adapt various circumstanced; grab opportunities or to adjust in possible unfavorable situations

A

Flexibility

ACC O2 (1 decks)

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