lec 2

Question 1

what are the three sections of the statement of financial position

Answer 1

assets, liabilities and shareholders equity

Question 2

what are current assts

Answer 2

assets that will be used or converted into cash within a year

Question 3

how are current assets listed in what order

Answer 3

order of liquidity

Question 4

what order are noncurrent assets listed in

Answer 4

in the order of permanacy so what ever ones are harder to get rid of

Question 5

what are current liabilities

Answer 5

they are liabilities that need to be payed within one year

Question 6

what are noncurrent liabilities

Answer 6

things that dont need to be payed in one year

Question 7

what is GAAP

Answer 7

generally accepted accounting principles

Question 8

what are the two parts of GAAP

Answer 8

IFRS and ASPE

Question 9

who needs to report under IFRS

Answer 9

IFRS

Question 10

who needs to report under ASPE

Answer 10

private companies

Question 11

what do partnerships and proprietorships need to report under

Answer 11

none of the two

Question 12

what accounting language do american companies have to use

Answer 12

US GAAP

Question 13

would you account for increased land value

Answer 13

No on financial statements you would only account for the amount you paid for the land

Question 14

two pillars of useful information

Answer 14

relevance and faithful representation

Question 15

what is relevance 2 parts

Answer 15

predictive value ( help with projections), and faithful representation ( free from errors )

Question 16

what are the enhancing information 4

Answer 16

comparable, verifiable, timeliness, understandability

Question 17

what are the two ways of valuing a asset

Answer 17

historical cost and fair value

Question 18

what is historical cost

Answer 18

its the cost the asset was bought for aka the origianl cost the good was bought for

Question 19

what is fair value

Answer 19

it is the current market value of the good

Question 20

what is reporting entity

Answer 20

its the distention from the business activities and the owners activities

Question 21

what does going concern mean

Answer 21

its a good thing and it means that the company will continue to operate for the next year

Question 22

what is periodicity

Answer 22

its the time periods that companies report there economic activity

Question 23

what is monetary unit

Answer 23

we only include transactions that can be expressed as a amount of money

Question 24

what are the two methods of recording economic activity

Answer 24

cash bases and accrual account

Question 25

what is the cash basis

Answer 25

this method follows only the movement of money

Question 26

you use your phone in may and you pay the bill in june when would you record it following the cash basis

Answer 26

you would record it in june because that’s when the money would move

Question 27

what is the accrual basis

Answer 27

transactions are recorded when the event occurs (following events so either when revenue occurs or expenses are incurred.

Question 28

what are the two ways of listing revenue

Answer 28

either accounts recivable wich means that the assets go up or revenue earned wich lowers liabilities

Question 29

what are two ways of listing expenses

Answer 29

if paid cash then assets go down if credit (accounts payable) then the liabilities go up

Question 30

using the accounting equation what do dividends do

Answer 30

lower assets cuz we’re paying cash and it lowers the shareholders equity because we’re paying money out of the company.

Question 31

what accouting standards do public canadian companies adhere to

Answer 31

ifrs ( international finacial reporting standards)

Question 32

what account would a cusotmers payment on credit go to

Answer 32

accounts receivable