Financial Statements Flashcards
1
Q
Revenue Recognition
Two requirements:
A
(1) completion of earnings process and
(2) reasonable assurance of payment.
2
Q
Five-step revenue recognition model:
A
- Identify contracts
- Identify performance obligations
- Determine transaction price
- Allocate price to obligations
- Recognize when (as) obligations are satisfied
3
Q
Free cash flow (FCF)
A
measures cash available for discretionary purposes. It is equal to operating cash flow less net capital expenditures.
4
Q
Common-size financial statement analysis:
A
