Reading Financial Statements Flashcards
Describe a balanced sheet
Represents a snapshot of the financial position of the company at a point of time.
Describe an Income statement
Contains the transactions of a company for a period of time and shows the profitability
Describe the statement of cashflow
Includes cash inflows and outflows from operating activities, investing activities and financial activities
What’s a Goodwill
The premium paid on the acquisition of another business
What is a Deferred income tax
Created when there is a timing difference between accounting income and taxable income
What is unearned revenue
Revenues that have been collected from customers but have not yet been earned by the company
Contingencies
A potential future liability that the company can reasonably estimate
What are authorised shares
The total number of shares a company can sell
What are outstanding shares
The total number of shares a company has sold
Examples of Assets
Prepaid expenses
Deferred income tax assets
Goodwill
Examples of liabilities
Unearned revenue
Contingencies
Capital lease obligations
Examples of shareholder’s equity
Common stocks and
Contributed surplus
What are common shares
Shares that allow for voting rights and participation in profits of the company
Preferred shares
Offer a fixed dividend that may not be paid annually
