Financial Statements Flashcards
Name the two different formats of presentation for the balance sheet.
Account Form and Report Form.
What are the categories that are listed on the statement of cash flows?
Operating Investing Financing
What are the items in other comprehensive income?
- Unrealized gains and losses on securities available for sale and certain hedging activities
- Pension cost adjustments,
- Foreign currency translation adjustments,
What are cash equivalents?
Short-term investments that are convertible into a known and fixed amount of cash and have an original maturity to the purchaser of three months or less.
How are liabilities presented on the balance sheet?
Liabilities are shown in order of maturity. Current liabilities are presented first, and then, long-term liabilities are presented.
How are long-term assets and liabilities defined?
Anything longer than a year to use
How is owner’s equity presented on the balance sheet?
In order of permanence.
What is the purpose of the statement of cash flows?
To explain the change in cash and cash equivalents that has occurred during the past accounting year.
Where and how are prior period adjustments shown?
Statement of Retained Earnings as adjustments to the beginning balance of retained earnings in the year that the error is discovered.
What approach is used when financial statements are prepared?
The all-inclusive approach.
