Accounting

Question 1

What is revenue recognition based on?

Answer 1

The delivery of products or services

Question 2

What are Accounts Receivable?

Answer 2

Cash a company is waiting on. It’s a negative in the CFS.

Question 3

How do you input a Prepaid Expense?

Answer 3

It’s a negative on the CFS and an asset.

Question 4

How do you input change in Accounts Payable?

Answer 4

It’s a positive on the CFS and a liability.

Question 5

What is Accounts Payable?

Answer 5

It tracks services that a company has received but has not yet paid for.

Question 6

What are Prepaid Expenses?

Answer 6

Services/items that have been paid but not yet incurred and it’s an asset

Question 7

What is Deferred Revenue?

Answer 7

It’s revenue gained through services/items that have not yet been delivered. (Pre-ordering)

Question 8

How do you input change in Deferred Revenue?

Answer 8

It’s a positive on the CFS and a liability

Question 9

How do you input change in inventory?

Answer 9

It’s a negative on the CFS.

Question 10

Why do you need an income and cash flow statement?

Answer 10

Income and cash flow are different. Different items affect different statements

Question 11

What does a balance sheet track

Answer 11

Assets, liabilities, and equity

Question 12

How do you input Capital Expenditures?

Answer 12

Initially on the CFS, gradually on the IS

Question 13

What is depreciation?

Answer 13

The gradual IS input for capital expenditure

Question 14

What is a non-cash expense?

Answer 14

An expense that decreases the companies taxes

Question 15

How do you input investments?

Answer 15

The cost of the investments go on the CFS. The income/interest from said investments go on the IS.

Question 16

How do you input Debt Raised?

Answer 16

It’s a positive on the CFS

Question 17

How do you input Debt Principal Repayment?

Answer 17

It’s a negative CFS

Question 18

How does debt effect the IS?

Answer 18

It’s a negative interest income

Question 19

How do you input dividends and stock repurchases?

Answer 19

They’re negative CFS

Question 20

How do you input capital gains/losses on the CFS?

Answer 20

You reverse the gain/loss of the IS

Question 21

How do you input Deferred Income Taxes?

Answer 21

It’s a positive CFS. It’s a negative IS.

Question 22

What is a Write Down?

Answer 22

It’s when a company decides to depreciate one of their assets for tax purposes.

Question 23

How do you input a Write Down?

Answer 23

It’s a positive CFS. It’s a negative IS.

Question 24

What’s the difference between a write down and a depreciation?

Answer 24

A depreciation is reocuring

Question 25

How do you input Stock-based compensation?

Answer 25

It's a positive CFS. It's a negative IS.

Question 26

How do you rebalance a BS after a company overpays for another one.

Answer 26

You create two new assets, Goodwill and Other Intangible Assets (Intellectual Property)

Question 27

What is the Amortization of Intangible Assets?

Answer 27

It's the depreciation of intangible assets.

Question 28

What are the two things necessary for an item to appear on an IS?

Answer 28

1. It must correspond to ONLY the period shown on the Income Statement. 2. It must affect the company's taxes.

Question 29

What fits under Operating Expenses?

Answer 29

Sales & Marketing, Research & Development, and General & Administrative

Question 30

What fits under Total Operating Expenses?

Answer 30

Depreciation, Amortization of Intangible Assets, and Stock-Based Compensation

Question 31

What is Net Income?

Answer 31

It's a companies' bottom line or post-tax income.

Question 32

What are non-cash expenses?

Answer 32

Depreciation and Amortization because they don't actually cost the company cash

Question 33

What does it mean for a BS to be balanced?

Answer 33

Total assets must equal total liabilities & equity

Question 34

What is a balance sheet?

Answer 34

It shows the company's resources and how it paid for them at a specific point in time.

Question 35

What is a liability?

Answer 35

Something that will result in, directly or indirectly, less cash in the future