Financial Statements Flashcards Preview

Agency Law > Financial Statements > Flashcards

Flashcards in Financial Statements Deck (15)
Loading flashcards...
1
Q
Which Personal Financial Statements are required?
A
Statement of Financial Condition & Statement of Changes in Net Worth
2
Q
How are assets and liabilities valued in a Personal Financial Statement?
A
Estimated current value
3
Q
How are estimated taxes that would be paid if all assets were converted into cash and all liabilities paid presented on a Personal Financial Statement?
A
Presented on Statement of Financial Condition between Liabilities and Net Worth
4
Q
What is the general presentation on a statement of financial condition?
A
Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth
5
Q
How is life insurance presented on a Personal Financial Statement?
A
Only shown if there is cash surrender value

It is shown net of loans against the policy
6
Q
How are business interests shown on a Personal Financial Statement?
A
Business Interests that constitute a large percentage of total assets should be separated from other investments
7
Q
What is the discreet view in an Interim Financial Statement?
A
Interim period is a separate accounting period - not GAAP

Same accounting principles used for annual reporting should be used.
8
Q
What is the integral view in an Interim Financial Statement?
A
Interim period is a part of the annual period - GAAP

Gross profit method may be used to estimate COGS and inventory

Temporary declines in inventory aren't recognized
9
Q
How are discontinued operations & extraordinary items reported in Interim Financial Statements?
A
Aren't prorated

Fully recognized in Interim Period as incurred

If it occurs in Q3 - it's recognized in Q3
10
Q
How are cumulative gains and losses reported in Interim Financials?
A
Reported as if they occurred in the first quarter
11
Q
How is inventory valuation handled in Interim Financials?
A
If inventory experiences a decline in value during an interim period - the loss is recognized in the interim period

If the loss is expected to be only temporary - no loss is recognized
12
Q
What is one of the primary problems with interim reporting?
A
The matching principle gets messed up - Expenses incurred in one period may benefit future periods
13
Q
For whom is Segment Reporting required?
A
Publicly traded companies
14
Q
What factors cause a segment to be significant and therefore to be reported separately?
A
Revenue of segment is 10% or more of total

Profit is 10% or more of total

Segment assets are 10% or more of total

75% Test - All segment revenues must equal 75% of total external revenues
15
Q
What is the disclosure requirement regarding sales of 10% or more for one customer?
A
If 10% or more of enterprise revenue comes from one customer - the segment making the sales must be disclosed