Financial Statements Flashcards
Next
Which personal financial statements are required?
Statement of Financial Condition
Statement of Changes in Net Worth
Next
How are assets and liabilities valued in a personal financial statement?
Estimated current value
Next
How are estimated taxes that would be paid if all assets were converted into cash and all liabilities paid presented on a personal financial statement?
Presented on Statement of Financial Condition between Liabilities and Net Worth
Next
What is the general presentation on a statement of financial condition?
Assets
- Liabilities
- Estimated taxes on assets sold
= Net Worth
Next
How is life insurance presented on a personal financial statement?
Only shown if there is cash surrender value
It is shown net of loans against the policy
Next
How are business interests shown on a personal financial statement?
Business Interests that constitute a large percentage of total assets should be separated from other investments
Next
What is the discreet view in an interim financial statement?
Interim period is a separate accounting period - not GAAP
Same accounting principles used for annual reporting should be used.
Next
What is the integral view in an interim financial statement?
Interim period is a part of the annual period - GAAP
Gross profit method may be used to estimate COGS and inventory
Temporary declines in inventory aren’t recognized
Next
How are discontinued operations & extraordinary items reported in interim financial statements?
Aren’t prorated
Fully recognized in Interim Period as incurred
If it occurs in Q3- it’s recognized in Q3
Next
How are cumulative gains and losses reported in interim financials?
Reported as if they occurred in the first quarter
Next
How is inventory valuation handled in interim financials?
If inventory experiences a decline in value during an interim period- the loss is recognized in the interim period
If the loss is expected to be only temporary- no loss is recognized
Next
What is one of the primary problems with interim reporting?
The matching principle gets messed up – Expenses incurred in one period may benefit future periods
Next
For whom is segment reporting required?
Publicly traded companies
Next
What factors cause a segment to be significant and therefore to be reported separately?
Revenue of segment is 10% or more of total
Profit is 10% or more of total
Segment assets are 10% or more of total
75% Test - All segment revenues must equal 75% of total external revenues
Next
What is the disclosure requirement regarding sales of 10% or more for one customer?
If 10% or more of enterprise revenue comes from one customer- the segment making the sales must be disclosed
