39573490
Description
Flashcards by Mary Geraldin, updated about 2 months ago
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Created by Mary Geraldin
about 2 months ago
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| Question | Answer |
| BS_Complete Set of FS under USGAAP | 1. Statement of financial position (balance sheet) 2. Statement of earnings (income statement) 3. Statement of comprehensive income 4. Statement of cash flows 5. Statement of owners' equity 6. Notes to Accounts |
| BS_Option of Classified BS | Allowed. Entities may present a classified balance sheet that distinguishes current and non-current assets and liabilities. |
| Liquidity Basis of Presentation of FS | Allowed. When Appropriate |
| Purpose of Income Statement (Brief) | 1. to provide information about the uses of funds in the income process (i.e., expenses) 2. the uses of funds that will never be used to earn income (i.e., losses), 3. the sources of funds created by those expenses (i.e., revenues), 4. the sources of funds not associated with the earnings process (i.e., gains). |
| Purpose of Income Statement ( Detailed / Main Answer) | 1. determining (a) profitability (b) value for investment purposes (c) creditworthiness. 2. The income statement is also useful in predicting information about future cash flows (e.g., the amounts, timing, and uncertainty of cash flows) based on past performance. |
| Cost | Is an amount (measured in money) expended for items such as capital assets, services (e.g., payroll), and merchandise received. Cost is the amount actually paid for something. |
| Unexpired costs | are costs that will expire in future periods and be charged (allocated in a systematic and rational manner or matched) against revenues from future periods |
| Understanding relationship between exp cost and unexpired cost | 1. Inventory Vs COGS 2. Unexpired/Prepaid Cost of Insurance vs Insurance Expense 3. Net Book Value of Fixed Assets Vs Depreciation expenses 4. Unexpired Cost of Patents vs Patent Expense (Ammortization) |
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