Week 2 Flashcards
3 sections of income statement in order
Operating, non operating, tax
What 2 expenses are apart of operating section
Selling and administrative
Gross profit formula
Sales revenue - Cogs
Cost of good available for sale formula
Beginning finished good inventory + cogs manufactured
Cogs formula
Cost of goods available for sale - ending finished goods inventory
Reporting entity dislosure includes
Related party reporting
Primary purpose of not for profit statement of activities is to provide information to who
Resource providers
Companies concentrations of credit risks
Requires a note disclosure
Financial statement line item explanations includes
Degree of credit of nonperformance risk
Types of risk / uncertainty
Nature of entity’s operation, use of estimates, significant concentrations in operations
Examples of disclosures
Depreciation methods, consolidation basis, interperiod tax allocation, inventory pricing, revenue recognition methods
Suggested note contents
Financial statement line item explanations, past events & current conditions that impact cash flows, additional considerations
Comprehensive income includes
Translation gain & loss on foreign currency, pension over-under fund calculation, gains / losses on cash flow hedging derivative instruments, unrealized holding gains/losses on available for sale debt securities
Change in depreciation method / change in useful life
Would receive prospective treatment in income statement
Asset turnover ratio
Sales / average total assets
