Preparation of the Financial Statements Flashcards

1
Q

this will help determine the business financial position at a specific point in time and over a period of time

A

Financial statements

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2
Q

The information from the accounting journal and the general ledger is used in preparation of your business financial statements, these are?

A

Income statement
statement of retained earnings
balance sheet
statement of cash flows

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3
Q

is almost uniquely important because it shows the overall profitability of your company for the time period in question

A

Income Statement

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4
Q

Also called a profit and loss statement

A

Income statement

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5
Q

this is the bottom line of the income statement

A

Net income or profit

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6
Q

it is either retained by the firm for growth or paid out as dividends to the firm’s owners and investors, depending on the company’s dividend policy

A

Net income

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7
Q

Net profit or loss must be calculated before the statement of retained earnings can be prepared

A

Statement of Retained Earnings

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8
Q

It is the second financial statement to be prepared in the accounting cycle

A

Statement of Retained Earnings

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9
Q

This statement shows distribution of profits that are retained by the company and which re distributed as dividends

A

Statement of Retained Earnings

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10
Q

is the financial statement that illustrate the firm’s financial position at a given point in time – the last day of accounting cycle

A

Statement of Financial Position

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11
Q

In Statement of Financial position, ___ are what the business owns

A

Assets

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12
Q

In Statement of Financial position, ___ are what the business owes

A

Liabilities and Equity

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13
Q

This statement compares two time periods of financial data and shows how cash has changed in the revenue, expenses, asset, liability and equity accounts during these time periods.

A

Statement of Cash Flow

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14
Q

this financial statement must be prepared last because it takes information from all three previously prepared financial statements

A

Statement of Cash Flow

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15
Q

shows and records the revenue when it was earned

A

Accrual Basis

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16
Q

Provides a record of revenue actually received, from the firm’s customers in most cases

A

Cash Basis

17
Q

(T or F)Statement of Cash flows shows the firm’s position on a Accrural basis rather than a Cash basis

A

False