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ACCT 217 > Ch 1.4 > Flashcards

Ch 1.4 Flashcards

1
Q

Statement of Income

A

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

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2
Q

Statement of changes in equity

A

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

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3
Q

Statement of financial position

A

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

A - L = S

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4
Q

Statement of Cash Flows

A

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

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5
Q

other: notes to the financial statments

A

contains aditional info that is cross referenced to main 4

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6
Q

other: statment of comprehensive income

A

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

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7
Q

other: statment of retained earning

A

private comps make this instead of a statement ofchanges in equity

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8
Q

quarterly synonynm

A

interim

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9
Q

when do many companies choose to end their acct year

A

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

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10
Q

typical acct year end

A

jan 31

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11
Q

statment of income

A

-List revenues first
-lists expenses

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

-net income/loss

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12
Q

when are cents used

A

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

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13
Q

why do ppl care about net income

A

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

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14
Q

statment of changes in equity

A

Shareholders equity= share capital +retained earnings

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15
Q

Share capital

A

money recieved by shareholders whne shares are initalily issues

share capital =common +preffered

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16
Q

Statement of changes in equity format

A
  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

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17
Q

Retained earning

A

cumulative amounts of net income retained; if negative= deficit

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18
Q

How do you calculate changes in retained earnings

A

revenue-expenses= net income/loss

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

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19
Q

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

A

?? they are <3

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20
Q

is dividends declared= divdends paid

A

NOT ALWAYS, can be different

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21
Q

What is the statement of changes in equity used for

A

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

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22
Q

What does it mean if a company is issuing shares

A

raising capitalwh

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23
Q

what dos it mean if a compapny is rebuying shares

A

surplus of cash they want to increase ownership

24
Q

Do private companyes create a staement of changes in equity!

A

NO they do a statement of retained earnings

25
Q

what is a statement of ffinancial position

A

a balance sheet, reports assets and who has CLAIM TO THOSE ASSETS

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

26
Q

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

A

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

27
Q

Acct equation

A

assets= liabilities +shareholders equity

28
Q

why does acct equation work

A

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

29
Q

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

A

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)

30
Q

Statement of Cash flows

A

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

31
Q

Order of statement of cash flows

A

operating activities

investing activities

financing activities

32
Q

questions statement of cahs flows answers

A

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

33
Q

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

A

statement of income!!!

because in SOI you find net income which is used in SCIE

34
Q

the statement of financial position and — are interrelated

A

statement of changes in equity

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

35
Q

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

A

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.

36
Q

ORDER OF PREPARING FINANCIAL STATEMTN

A

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

37
Q

IF NET INCOME IS LISTED TWICE

A

YES ITS THE SAME NUMBER

38
Q

CONSOLIDATED STATEMENT

A

statement of a company and alll its usbsidiaris

39
Q

comparative statements

A

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

40
Q

unit of measure

A

thousands or whatever! read

41
Q

where does the accumulated other comprehensive income acct go

A

shareholders equity

42
Q

annual report includes:

A

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

43
Q

what is mda

A

must accompany the financial statements released by public companies.

provides management’s perspective on the financial performance during the period covered by the financial statementsand 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.

44
Q

auditors report

A

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.

45
Q

Notes to the Financial Statements

A

Explanatory notes and supporting schedules

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

46
Q

do 1.4c activity

A
47
Q

Which financial statements should you review before you invest?

A

ALL OF THEM + NOTES TO FINANCIAL STATEMENTS

48
Q

Which is the most important financial statement for investors?

A

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

49
Q

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

A

yes it is

50
Q

paying dividends is what type of activity?

A

FINANCIAL- OUTFLOW OF CASH

51
Q

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

A

INVESTING ACTIVITY-OUTFLOE

52
Q

Where is deferred revenue noted?

A

SFP

53
Q

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

A

STATEMENT OF FP

STATEMETN OF CF

54
Q

dividends declared influences

A

retained earnings

55
Q

common shares influecnes

dividends declared influences

A

shareholders equity

retained earnings

56
Q
A

ACCT 217 (62 decks)

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