Flashcards
F1_M1_Becker Text Book
Cards in this deck (9)
- 1BS_Complete Set of FS under USGAAP1. Statement of financial position (balance sheet)
2. Statement of earnings (income statement)
3. Statement of comprehensive income
4. Statement of cash flows
5. Statement of owners' equity
6. Notes to Accounts - 2BS_Option of Classified BSAllowed.
Entities may present a classified balance sheet that distinguishes current and non-current
assets and liabilities. - 3Liquidity Basis of Presentation of FSAllowed.
When Appropriate - 4Purpose of Income Statement (Brief)1. to provide information about the uses of funds in
the income process (i.e., expenses)
2. the uses of funds that will never be used to earn income (i.e., losses),
3. the sources of funds created by those expenses (i.e., revenues),
4. the sources of
funds not associated with the earnings process (i.e., gains). - 5Purpose of Income Statement ( Detailed / Main Answer)1. determining
(a) profitability
(b) value for investment purposes
(c) creditworthiness.
2. The income statement is also useful in predicting information about future
cash flows (e.g., the amounts, timing, and uncertainty of cash flows) based on past performance. - 6CostIs an amount (measured in money) expended for items such as capital assets, services (e.g., payroll), and merchandise received.
Cost is the amount actually paid for something. - 7Unexpired costsare costs that will expire in future periods and be charged (allocated in a
systematic and rational manner or matched) against revenues from future periods - 8Understanding relationship between exp cost and unexpired cost1. Inventory Vs COGS
2. Unexpired/Prepaid Cost of Insurance vs Insurance Expense
3. Net Book Value of Fixed Assets Vs Depreciation expenses
4. Unexpired Cost of Patents vs Patent Expense (Ammortization) - 9—
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- CPA FAR Flashcards on F1_M1_Becker Text Book, created by Mary Geraldin on 28/05/2024.
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