M-1 Flashcards by Alicia Diggs

Net Income formula

Net Gross Sales
-COGS
=GP
-sell/admin
=Op Inc
+- Gain/Loss on Sale
=Inc from Cont Op
-Inc Tax Exp
=Inc BF Disc Ops
+-Sale of Disc Ops
=NI

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Held for Sale critieria

Management commits to sale
Avail for immediate Sale
Buyer Initiated
Sale is probable wn a yr
Actively Marketed
Unlikely to change mind to sale

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Earnings Per Share

Income Available to SHs/ Weighted Ave of Common Shares OS

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Number of days to file 10-K with SEC

60 days to file=large accelerated filers
75 days to file=accelerated filers
90 days to file=all others

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10-Q Accelerated Filers

Has 40 days to file after fiscal quarter ends

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Audited Financials will most likely be found in which of SEC required Form?

10-K Annual Report

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When is a liab created and RE reduced?

on date of declaration

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5 Step Revenue Recognition-ISTAR

I = I dentify the contract (oral/written)
S= Identify Specific Performance Obligations
T= Determine Trans Price
A = Allocate the Trans Price
R= Recognize Rev

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OCBOA

Other Comprehensive Basis of Accounting

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Presentation of OCBOA

Financial Statement titles should differentiate OCBOA financials from Accrual Basis financial statements

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Times Interest Earned

Income BF interest exp and taxes/interest exp

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Return on Assets

Net Income/Avg total Assets

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Debt-to-equity Ratio

Total Liabs/Equity

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Current Ratio

Current Assets/Current Liabs

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Quick Ratio

Quick Assets/Current Liabs

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3 Diff Valuation Techniques

Market Approach
Income Approach
Cost Approach

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OCBOA

Other Comprehensive Basis of Accounting

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Special Purpose Frameworks

Are non-GAAP presentations that include Cash Basis, Modified Cash Basis, and Tax Basis of Accounting

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Converting Cash to Accrual

Cash Basis REV
+End AR
-Beg AR
-End Unearned REV
+Beg Unearned REV

Inventory Turnover Ratio

Beg Inv
+ Purchases
=Goods Avail for Sale
- End Inv
=COGS
Inv Turnover=
COGS/Avg Inv

Net Profit Margin

Net Income/Net Sales

Return on Equity

Net Income-Preferred Divs/Avg Total Equity

What are Quick Assets?

Cash & Cash Equivs + Marketable Secs + AR

Comprehensive Income

=Net Income + Other Comprehensive Income

Other Comprehensive Income (closed to accumulated other comprehensive income)

Revenue, expenses, gains/losses that are included in comprehensive income but excluded from Net Income 1. Pension Adjustments 2. Unrealized G/L on Avail for Sale debt Sec/Hedges 3. Foreign Currency items 4. Instrument Specific Credit Risks

Dollar Value LIFO

Inventory method that measures inventory in dollars and uses a price index to adjust for changing price levels (inflation/deflation)

Net realizable value

Selling price-costs to complete & sell

Lower of Cost/Net realizable Value

Find Net Realizable Value...whichever is lower

Inventory

Beg Inv + Purch -COGS =End Inv

LIFO

inventory method that results in the most cash retained in business

COGS

=Sales/cost of markup + 1 =Sales x (1-gross profit)

Price-per-Earnings

=Market Share/EPS

Days Sales in AR

365/AR Turnover AR Turnover=Sales/Avg AR

Full set of GAAP Financial Statements:

Statement of financial position (balance Sheet) Statement of Earnings (income stmt) Statement of Comprehensive Income Statement of Cash Flows Statement of Owner's Equity

8-K

filed by US registered company to disclose changes whenever a material event occurs. Generally have 4 days to file

Weighted Avg # of CS outstanding

Beg shares OS + Shares sold during period - Shares reacquired during period + Stock div's and Stock splits (retroactively adjusted) - Reverse stock splits (retroactively adjusted) = Weighted AVG # of CS outstanding

Book Value per Common Share

=Common Shareholder's Equity/Common Shares Outstanding

Cash to Accrual

Cash Basis beg rev + CY AR - PY AR - End Unearned Rev + Beg Unearned Rev =Accrual Basis Revenue

Under GAAP, what is the reasonable minimum threshold % for representing a "major part" of the leased asset's economic life?

75%

FOB destination

title does not pass until the "machine" is received at its destination by purchaser.

Terms of a Finance Lease:

1. the lease transfers ownership to the lessee by the end of the lease term. 2. the lease contains a written purchase option that the lessee is reasonably certain to exercise. 2. the PV at the beg of the lease equals or exceeds the FV of the leased property (90% of FV is the minimum). 4. the lease term is the major part (75% or more) of the estimated economic life of the leased property. 5. the asset is specialized such that there is no alternative use to the lessor.

What is the underlying concept governing the GAAP pertaining to recording gain contingencies?

Conservatism (Also, gain contingencies are not recognized until realized)

Nongovernmental NFP's are required to provide which of the following external financial statements?

1. Statement of Financial Position 2. Statement of Activities 3. Statement of Cash Flows

The measurement focus of governmental fund accounting is on?

Current financial resources

A statement of activities for a NFP is similar to what financial statement of a For-Profit entity?

Income Statement

What government unit uses the same basis of accounting as a Special Revenue Fund?

Capital Projects