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Financial Analysis And Reporting > Prelim > Flashcards

Prelim Flashcards

1
Q

Is the process of evaluating financial and other information for decision making

A

Financial Analysis

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2
Q

Is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy the needs of customers

A

Business

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3
Q

Different classification or types of business in the philippines

A

Service business
merchandising business manufacturing business
other businesses

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4
Q

Provides intangible goods or services to customers. Usually generates profit by charging for labor or other services rendered to consumers government or other companies

A

Service business

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5
Q

Purchase products from other businesses or manufacturers and sell them to customers. Usually have merchandising inventories in their current asset account. Generate profits by providing markup prices on the goods available for sale

A

Merchandising business

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6
Q

Convert raw materials, labor and overhead into finished products that are available for sale to customers

A

Manufacturing business

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7
Q

This includes businesses that can’t be classified as service merchandising or manufacturers

A

Others businesses

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8
Q

Types of business according to ownership structures

A

Proprietorship
Partnership
Corporation

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9
Q

Forms of business organization

A

Sole proprietorship
Partnership
Corporation
Cooperative
Limited liability company or LLC

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10
Q

Popular business structure.It is easy to set up and have one owner

A

Sole proprietorship

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11
Q

Business that is owned by 2 or more individuals as partners. Classify as either general or limited.

A

Partnership

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12
Q

Allow both partners to invest in a business with 100% responsibility for any business debt and don’t require formal agreement

A

General partnership

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13
Q

Requires owners to file paperwork with the state and compose formal agreements that describe who is responsible for certain debts and details of partnership

A

Limited partnership

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14
Q

Acts as a unique and separate entity from its shareholders. Pays its own taxes before distributing profits or dividends to shareholders.

A

Corporation

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15
Q

Is a private business organization or farm that a group of individuals own and runs to meet a common goals these owners work together to operate a business and they share the profits and other benefits

A

Cooperative

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16
Q

The most common form of business structure for small businesses. Define as a separate legal entity and may have an unlimited amount of owners. Typically tax as a sole proprietorship and require insurance in case of lawsuit.

A

Limited liability company

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17
Q

3 main types of business activities

A

Operating business activities Investing business activities
Financing business activities

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18
Q

It is a process of identifying, analyzing, summarizing, and journalizing or recording financial transactions pertaining to a business

A

Accounting

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19
Q

Essential elements of the definition of accounting

A

Identifying
Analyzing
Summarizing
Journalizing /recording

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20
Q

Analysis each business transaction identify whether the transaction is accountable event or non-accountable event

A

Identifying

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21
Q

Process of examining, interpreting, and understanding financial information presented in financial statements reports and other accounting records

A

Analyzing

22
Q

Process of presenting the final value of classify the account in a separate statement called trial balance

A

Summarizing

23
Q

Process of keeping a record of all your business transactions tracking and chronological order and generally includes the date the account your debiting or crediting and a brief description of transaction that occurred.

A

Journalizing/Recording

24
Q

Types of accounting information

A

Financial accounting
Management accounting
Tax accounting
Non-for-profit accounting

25
Q

Information describing the financial resources obligations and activities of an economic entity

A

Financial accounting

26
Q

Information intended to aid management in running the business

A

Management accounting

27
Q

The subsector of accounting that deals with the preparations of tax returns and tax payments

A

Tax accounting

28
Q

Use for government agencies, churches, NGO’s charitable institutions and schools

A

Non-for-profit accounting

29
Q

Users of accounting information

A

Internal users
External users

30
Q

Users that directly involved in managing business

A

Internal users

31
Q

Users that not indirectly involved in business

A

External users

32
Q

Accounting principles

A

Measurement
Revenue Recognition
Expense recognition
Full disclosur

33
Q

Also called the cost principle prescribes that accounting information is based on actual cost cause is measured on a cash or an equal to cash basis

A

Measurement

34
Q

It is also called sale is the amount received from selling products and services

A

Revenue Recognition

35
Q

It prescribes that a company record the expenses it incurred to generate revenue reported it is the key to modern accounting

A

Expense recognition

36
Q

Prescribes the company report a details behind financial statements that would impact users decision. they are often in the footnotes to the statements

A

Full disclosure

37
Q

Accounting assumptions

A

Monetary unit
Time period
Business entity
Going concern

38
Q

Means that the accounting information reflects a presumption that the business will continue operating instead of being close or sold

A

Going concern

39
Q

Means that we can express transactions and events in monetary or money units money is the common denominator in business

A

Monetary unit

40
Q

Presumes that the life of a company can be divided into time periods, such as months and years and that useful reports can be prepared for those periods.

A

Time period

41
Q

Means the business is accounted for separately from the other business entities including its owners. A business entity can take one of the three legal forms: proprietorship, partnership or corporation.

A

Business entity

42
Q

Accounting constraints

A

Materiality
Benefit exceeds cost

43
Q

Prescribes that only information that influences decisions need to be disclosed

A

Materiality

44
Q

Prescribes that only information would benefits of disclosure greater than the cost of providing it needs to disclose

A

Benefit exceeds cost

45
Q

they are documents that report on an individual or an organization’s business in monetary terms and it provides the meaning of taking the post of the business. It tells us how a business is performing and wherr it stands.

A

Financial statements

46
Q

They are present economic resources controlled by the entity as a result of past events. An economic resource is a right that has a potential to produce economic benefits

A

Assets

47
Q

They are present obligation of the entity to transfer an economic resources as a result of past events and obligation is duty of responsibility that the entity has no practical ability to avoid.

A

Liabilities

48
Q

It is defined as the owner’s interest in the company assets. In other words upon liquidation after all the liabilities are paid of the shareholders own remain assets this is why it is often referred to as net assets or assets minus liabilities.

A

Owner’s equity

49
Q

An event that has a direct effect on operation on the business unit and can be expressed in terms of money

A

Business Transaction

50
Q

Five principal reports resulting from the process of financial accounting

A
  1. Statement of financial position or balance sheet statement
  2. Statement of profit or loss and other comprehensive income
  3. Statement of changes on owner’s equity
  4. Statement of cash flows
  5. Note to the financial statements and other explanatory notes

Financial Analysis And Reporting (1 decks)

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