Ch 1.4

Question 1

Statement of Income

Answer 1

reports revenues and expenses, how did the company’s operation perform during period?

Question 2

Statement of changes in equity

Answer 2

changing in each part of shareholders equity (common shares and retained earning), and also TOTAL EQUITY during period

Question 3

Statement of financial position

Answer 3

report of assets and liabilites and differece (shareholders equity) AT ONE MOMENT OF TIME

A - L = S

Question 4

Statement of Cash Flows

Answer 4

shows where a company got cash durong a period of time + how cash was used

Question 5

other: notes to the financial statments

Answer 5

contains aditional info that is cross referenced to main 4

Question 6

other: statment of comprehensive income

Answer 6

must be prepared when a public compreports comprhensive income earned form certain iterms

Question 7

other: statment of retained earning

Answer 7

private comps make this instead of a statement ofchanges in equity

Question 8

quarterly synonynm

Answer 8

interim

Question 9

when do many companies choose to end their acct year

Answer 9

whenever inventory and operations are slow, there fore it is less effort

Question 10

typical acct year end

Answer 10

jan 31

Question 11

statment of income

Answer 11

-List revenues first
-lists expenses

• revenues-expenses= net income/loss before tax
• net income b4 tax -income tax

-net income/loss

Question 12

when are cents used

Answer 12

round transactions for official records, but for internal records you should use cents

Question 13

why do ppl care about net income

Answer 13

-investors use past income to predict future income (buying/selling shareS)
-creditors use this to predit risk of lending money

Question 14

statment of changes in equity

Answer 14

Shareholders equity= share capital +retained earnings

Question 15

Share capital

Answer 15

money recieved by shareholders whne shares are initalily issues

share capital =common +preffered

Question 16

Statement of changes in equity format

Answer 16

1. beginning balance of share capital
2. any new shares being issues (or deduct any amount paid to re-buy shares)

Common shares beginning of period + common shares sold - common shares rebought = common shares end of period

Question 17

Retained earning

Answer 17

cumulative amounts of net income retained; if negative= deficit

Question 18

How do you calculate changes in retained earnings

Answer 18

revenue-expenses= net income/loss

retained earning at beginning of period + net income/lloss - dividends declared = retained earnings, end of period

Question 19

Why are dividends declared not part of the expenses in the statemetn of changes in equity

Answer 19

?? they are <3

Question 20

is dividends declared= divdends paid

Answer 20

NOT ALWAYS, can be different

Question 21

What is the statement of changes in equity used for

Answer 21

1) looking at divdiend declaration practices (high % of net income given to shareholds or is it reinvesting the net income to grow)
2) seeing if company is issuing or rebuying shares

Question 22

What does it mean if a company is issuing shares

Answer 22

raising capitalwh

Question 23

what dos it mean if a compapny is rebuying shares

Answer 23

surplus of cash they want to increase ownership

Question 24

Do private companyes create a staement of changes in equity!

Answer 24

NO they do a statement of retained earnings

Question 25

what is a statement of ffinancial position

Answer 25

a balance sheet, reports assets and who has CLAIM TO THOSE ASSETS Assets claimed by creditors= liabilities Assets claimed by shareholders= shareholders equity

Question 26

Assets claimed by creditors= liabilities Assets claimed by shareholders= shareholders equity

Answer 26

Assets claimed by creditors= liabilities Assets claimed by shareholders= shareholders equity

Question 27

Acct equation

Answer 27

assets= liabilities +shareholders equity

Question 28

why does acct equation work

Answer 28

because assets are broken up to the assets owned by creditors (liabilities) and those owned by shareholders (shareholders equity)

Question 29

*** 3 : what does right hand side of acct equation show

Answer 29

how the assets have been financed (debt from creditors or LIability) OR (investement from shareholders share capital) or (net income retained in company shareholders equity)

Question 30

Statement of Cash flows

Answer 30

focuses on cash recipets and cash payments of a business for a specific period of time -FOCUSES ON FINANCIANG ACTIVIIITSE, INVESTIN GACITVIIES, AND OEPRATING ACTIVITIES

Question 31

Order of statement of cash flows

Answer 31

operating activities investing activities financing activities

Question 32

questions statement of cahs flows answers

Answer 32

where did cash come form? where was it used during the period? what is the change in cash balance?

Question 33

The statement of changes in equity depends, in part, on the results of the

Answer 33

statement of income!!! because in SOI you find net income which is used in SCIE

Question 34

the statement of financial position and --- are interrelated

Answer 34

statement of changes in equity ending balances of each component reported on the statement of changes in equity

Question 35

The statement of cash flows and the -- are also interrelated.

Answer 35

statement of financial position The statement of cash flows shows how the cash account changed during the period. The ending amount of cash must agree with the amount of cash shown in the assets section of the statement of financial position.

Question 36

ORDER OF PREPARING FINANCIAL STATEMTN

Answer 36

1) STATEMENT OF INCOME 2) STATEMENT OF CHANGES IN EQUITY 3) STATEMENT OF FINANCIAL POSITION 4) STATEMENT OF CASH FLOWS

Question 37

IF NET INCOME IS LISTED TWICE

Answer 37

YES ITS THE SAME NUMBER

Question 38

CONSOLIDATED STATEMENT

Answer 38

statement of a company and alll its usbsidiaris

Question 39

comparative statements

Answer 39

public corps have to present thtier statments for at least 2 fiscal years so people can companre

Question 40

unit of measure

Answer 40

thousands or whatever! read

Question 41

where does the accumulated other comprehensive income acct go

Answer 41

shareholders equity

Question 42

annual report includes:

Answer 42

Public corporations must produce an annual report each year. includes: -the financial statements -management discussion and analysis, an independent auditor’s report, -the notes to the financial statements, - summary of key financial ratios

Question 43

what is mda

Answer 43

must accompany the financial statements released by public companies. provides management’s perspective on the financial performance during the period covered by the financial statements and provides important context for interpreting them. he MD&A often includes a discussion about the company’s initiatives in relation to corporate social responsibility and sustainable development.

Question 44

auditors report

Answer 44

independent auditor who is appointed by the shareholders on the recommendation by the board of directors. Reading the auditor’s report before reviewing a company’s financial statements will provide users with important additional context.

Question 45

Notes to the Financial Statements

Answer 45

Explanatory notes and supporting schedules ex:Descriptions of the significant accounting policies and methods used in preparing the statements.E

Question 46

do 1.4c activity

Question 47

Which financial statements should you review before you invest?

Answer 47

ALL OF THEM + NOTES TO FINANCIAL STATEMENTS

Question 48

Which is the most important financial statement for investors?

Answer 48

Statement of Income= shows past performance and can be used to predict future performance

Question 49

The net income of a proprietorship is taxed on the owner’s personal income tax return.

Answer 49

yes it is

Question 50

paying dividends is what type of activity?

Answer 50

FINANCIAL- OUTFLOW OF CASH

Question 51

If a company is Selling equipment that the company has finished using, what type of activity is it

Answer 51

INVESTING ACTIVITY-OUTFLOE

Question 52

Where is deferred revenue noted?

Answer 52

SFP

Question 53

A company’s cash balance at the end of an accounting period is found on both the

Answer 53

STATEMENT OF FP STATEMETN OF CF

Question 54

dividends declared influences

Answer 54

retained earnings

Question 55

common shares influecnes dividends declared influences

Answer 55

shareholders equity retained earnings