SS A: Conceptual Framework and Financial Statements Flashcards
1
Q
What are qualitative characteristics of financial reports?
A
Fundamental: Relevance and faithful representation
Enhancing: Comparability, verifiability, timeliness, understandability
2
Q
What are constraints & assumptions of financial repots?
A
- Cost constraints
- Accrual accounting
- Going concern
3
Q
What are the elements of financial reports?
A
- Assets
- Liabilities
- Equity
- Income
- Expenses
4
Q
Net income formula
A
Net income = total revenue - total expenses
5
Q
Retained earnings formula
A
Ending balance of RE = Beginning Balance + Net Income - Dividends
6
Q
What is the flow of financial statements?
A
- Income statement
- Changes in equity
- Balance sheet
- Cash flow
7
Q
What is a consolidated income statement?
A
When an organization is made up of several corporations and it is reported as one entity
8
Q
Gross profit formula
A
Gross profit = Net sales - COGS
9
Q
What are three statements of cash flows?
A
- Operating activities
- Investing activities
- Financing activities
