FAR CPA EXAM Flashcards
Change in Cash (Accrual Basis Net Income to Cash Flow From Operations
Change in cash=Change in Liabilities+Change in Equity-Change in Other Assets
CGS to Cash
Cash payments= - change in Liabilities - Change in Equity + Change in Other Assets
Amount paid to suppliers
Amount paid to suppliers=Cost of Goods Sold-Inventory Decrease-AP increase
Supplemental Disclosure for Indirect Method
Income taxes paid and interest payments must be disclosed in the notes or supplementary schedule
Prepaid Insurance Account for Statement of Cash Flows
Beginning Prepaid Insurance+Insurance Payments-Insurance Expense=Ending Prepaid Insurance
Accounts Receivable
Beginning Accounts Receivable + Sales - Collections = Ending Accounts Receivable
Inventory Turnover
Cost of Sales/Average Inventory
Acid Test Ratio
Liquid Current Assets/Current Liabilities
Average Days to Collect Accounts Receivable
365/Accounts Receivable Turnover
Cost of Goods Sold
Beginning Inventory+Purchases-Ending Inventory=Cost of Goods Sold
Accounts Receivable Turnover
Credit Sales/Average Accounts Receivable
Basic Inventory Equation
Beginning Inventory+Purchases=Ending Inventory+Cost of Goods Sold
Ending Inventory
Ending Inventory=Beginning Inventory+Purchases-Cost of Goods Sold
Times Interest Earned Ratio
Income Before Interest Expense and Income Tax/Interest Expense
Book Value Per Share
Total Owner’s Equity/Number of Shares Outstanding
