Reading 22: Financial Reporting Mechanics

Question 1

Assets

Answer 1

Cash and cash equivalents
Accounts receivable (Contra: Allowance for bad debt)
Inventory
PP&E (Contra: Accumulated depreciation)
Prepaid expenses
Deferred tax asset
Marketable securities
Intangible assets (Contra (excl. goodwill: Accumulated amortization)
Investment in affiliates

Question 2

Liabilities

Answer 2

Accounts payable
Income tax
Unearned revenue
Short term debt
Long term debt (Bonds payable)
Deferred tax liability

Question 3

Revenue

Answer 3

Sales
Gains / Losses
Investment Income

Question 4

Expenses

Answer 4

Cost of goods sold
Selling, general and administrative
Depreciation and amortization
Tax
Interest income / expense
Losses (Incidental transactions)

Question 5

Owners Equity

Answer 5

Capital (common stock)
Additional paid in capital (contra: treasury stock e.g. share repurchases)
Retained earnings
Other comprehensive income

Question 6

Accrual Accounting

Answer 6

Unearned Revenue (Magazine Subscriptions)
Accrued Revenue (Goods sold on account)
Prepaid Expenses (Shopping mall rent)
Accrued Expenses (Wages)