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Flashcards in Personal Financial Statements Deck (15)
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1
1

Which Personal Financial Statements are required?

Required: Statement of Financial Condition (Statement of Changes in Net Worth is optional)

2
1

How are assets and liabilities valued in a Personal Financial Statement?

Estimated current value

3
1

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?

Presented on Statement of Financial Condition between Liabilities and Net Worth

4
1

What is the general presentation on a statement of financial condition?

Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth

5
1

How is life insurance presented on a Personal Financial Statement?

Only shown if there is cash surrender value

It is shown net of loans against the policy

6
1

How are business interests shown on a Personal Financial Statement?

Business Interests that constitute a large percentage of total assets should be separated from other investments

7
1

What is the discreet view in an Interim Financial Statement?

Interim period is a separate accounting period - not GAAP

Same accounting principles used for annual reporting should be used.

8
1

What is the integral view in an Interim Financial Statement?

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
1

How are discontinued operations & extraordinary items reported in Interim Financial Statements?

Aren't prorated

Fully recognized in Interim Period as incurred

If it occurs in Q3 - it's recognized in Q3

10
1

How are cumulative gains and losses reported in Interim Financials?

Reported as if they occurred in the first quarter

11
1

How is inventory valuation handled in Interim Financials?

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
1

What is one of the primary problems with interim reporting?

The matching principle gets messed up - Expenses incurred in one period may benefit future periods

13
1

For whom is Segment Reporting required?

Publicly traded companies

14
1

What factors cause a segment to be significant and therefore to be reported separately?

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
1

What is the disclosure requirement regarding sales of 10% or more for one customer?

If 10% or more of enterprise revenue comes from one customer - the segment making the sales must be disclosed