Financial Statements

Question 1

Current Assets

Expected to be realized in one year or operating cycle (whichever is longer)

Answer 1

Cash/cash equivalents
Certain individual investments in trading, available-for-sale, and held-to-maturity debt securities
Receivables
Inventories
Prepaid expenses
Certain individual investments in equity securities

Question 2

Noncurrent Assets

Nonoperating items expected to be held beyond the longer of one year or the operating cycle

Answer 2

Investments in equity securities made to control or influence another entity
other noncurrent equity securities
Funds restricted as to withdrawal or use for other than current operations - retire long-term debt, pension obligations
Capital assets not used in current operations - idle factories, undeveloped land
PP&E
Intangible assets
other noncurrent assets - deferred tax assets, long-term receivables

Question 3

Current liabilities

Expected to be liquidated within the longer of one year or operating cycle

Answer 3

Trade payables
Other payables
Unearned revenues
Short-term notes to acquire capital assets
Payments on current portion of serial bonds or other noncurrent debt

Question 4

Noncurrent liabilities

Answer 4

Noncurrent notes and bonds
Lease liabilities
Most post retirement benefits
Obligations under warranty
Advances for noncurrent commitments to provide goods or services
Deferred revenue

Question 5

What is Working Capital?

Answer 5

Difference between current assets and current liabilities

Question 6

Equity

The residual after total liabilities are subtracted from total assets

Answer 6

Capital contributed by owner
Retained earnings
Accumulated OCI
Noncontrolling interest in a consolidated entity

Question 7

Net income/loss (Equation)

Closed to retained earnings

Answer 7

Revenues
-Expenses
+Gains
-Losses

Question 8

Cost of Goods Sold (COGS) (Equation)

Answer 8

Beginning inventory
+Purchases or COGM
-Ending Inventory

Question 9

Cost of Goods Manufactured (work in process equation)

Answer 9

Beginning work in process
+Sum of periodic manufacturing costs
-Ending work in process

Question 10

Cost of Goods Manufactured (Finished goods inventory)

Answer 10

Ending finished goods inventory
+COGS
-Beginning finished goods inventory

Question 11

Material items that are unusual in nature, infrequent in occurrence, or both are reported as?

Answer 11

Separate component of income from continuing operations.
Not reported net of taxes.
Effects on EPS must not be reported on income statement

Question 12

Discontinued operations are reported?

Answer 12

Separately net of tax in the income statement, after the results on continuing operations

Question 13

Comprehensive income includes all changes in equity except?

Answer 13

Investments by and distributed to owners

Question 14

Items of OCI include?

Answer 14

Unrealized gains/losses on available for sale debt securities.
Gains/losses on derivatives designated and qualifying as cash flow hedges.
Foreign currency translation adjustments for foreign operations.
Changes in fair value attributable to instrument specific credit risk of financial liabilities for which the fair value option is elected.

Question 15

OCI must be reported in one of two ways

Answer 15

One continuous statement.
Two separate but consecutive statements.