Financial Notes Flashcards
(44 cards)
Revenue Recognition Note
If it is not going to be recognised as a sale but has already been included in revenue what do you do?
Remove revenue and record a liability
Minus the sale from the revenue total on TB
Either have deferred income in CL or Long term loan in NCL
You will also need to add the number to the inventory as they are no longer being sold
When does an asset meet the criteria of non-current assets held for sale?
It is actively marketed at fair value
How to treat a Non current asset that is being held for sale
Cost (usually cost less accumulated depreciation)
Then minus the depreciation charge ( the depreciation you have to figure out)- this should have months in it e.g. October 2015- March 2016 would be 6/12 months
Then goes to SOFP- CA
Where does gain on revaluation go
Other comprehensive Income and Equity
How to figure out gain on revaluation
Cost
(Accumulated Depreciation)
=Carrying amount
Revaluation value in question
Difference between the two is the gain/loss on revaluation
If there is a provision for directors bonuses for 1% of revenue how does that get treated
1% of revenue goes as an accrued expense in CL
1% of revenue goes to Admin expenses
What happens to interim dividends
Deducted from retained earnings in SOCIE
What happens to proposed final dividends
Only shown in notes of the statements
What is shown in the Current Liability section of SOFP for tax
Estimated income tax provision as in the notes
If the bank is on the right side is it a current liability or current asset
Current liability
If value of tax is on right side is it under or over provision
Over
If tax is on left side is it under or over provision
Under
What happens if deferred tax increases
Increase gets added to tax in Profit and Loss statement
Total deferred tax including increase and original goes to NCL
What would not meet the criteria for a discounted operation
A separate major line of business or geographical area of operations
If a company hasn’t yet sold or developed a product which ratio is most relevant
Current ratio
What happens when a bonus or rights issue occurs
Prior year EPS should be restated by the inverse of the bonus or rights fraction
What does a diluted Earning per Share deal with
Options and convertibles
What does a basic Earning per Share deal with
With full price issues, rights issues and bonus issues
How to find the theoretical ex-rights price following the rights issue when rights issue is 1 for every 3 previously owned
3 multiplied by previous share price
1 multiplied by the market price
Add these together to get 4 shares worth
True or False: The balance sheet shows a company’s financial position at a specific point in time.
True
Fill in the blank: Assets are listed on the balance sheet in order of __________.
liquidity
Where do you find revenue in financial statements?
In the income statement.
What section of the balance sheet includes liabilities?
The liabilities section.
Which financial statement provides information about cash inflows and outflows?
The cash flow statement.
