Business - Mba Accounting

Front 1

Income Statement - 1st batch of items?

Back 1

- Revenue
- Returns & Allowances
- Net Sales
- COGS
- Gross Profit

Front 2

Income Statement - 2nd batch of items?

Back 2

- Sales Commissions
- Promotional & Advertising
- Costs
- Selling Expenses
- G&A
- Net Income

Front 3

Balance Sheet - 1st batch of items?

Back 3

Assets
- Cash
- Accounts Recievables
- Inventory

Front 4

Balance Sheet - 2nd batch of items?

Back 4

Liabilities & SHE
Liabilities and Equity
- Accounts Payable
- Equity (common stock)
- Retained Earnings

Front 5

Cash Flow Statement - Operations 1st batch of items?

Back 5

Net Cash Flow from Operations (CFO)
- Net Income
- Inventory
- Accounts Receivable
- Accounts Payable

Front 6

Cash Flow Statement – Issuing Shares (CFI) 2nd batch of items?

Back 6

Net Cash Flow - Income (CFI)
– Issuing of Shares

Front 7

Cash Flow Statement – End Summary items

Back 7

Net Cash Flow - End Summary
- Change in Cash
- Beginning Cash Balance
– Ending Cash Balance

Front 8

Name 5 different types of Assets

Back 8

- Cash
- Inventory
– Ownership of Land or a Car
- Accounts Receivable
- Prepaid anything (ie. Utilities)

Front 9

Name 4 different types of Liabilities

Back 9

- Bank Loans
- Long-term (LT) Car loan
- Accounts Payable (30 days)
- Utilities payable (owing but not yet paid)

Front 10

Name 3 different types of Equity

Back 10

- Owners Private Investment
- Common Shares
- Preferred Shares

Front 11

Give 8 examples of Expenses

Back 11

- COGS Expense (X)
- Lease
- “Other” Expenses
- Salaries (non-variable comm.)
- Wages (variable commission)
- Utilities (paid)
- Amortization
- Depreciation
– Advertising

Front 12

Give 2 examples of Revenue

Back 12

- Sales Revenue
- Sales Returns & Adjustments

Front 13

What are some things that need to be taken in to account when building or analyzing Financial Statements?

Back 13

- Read and incorporate the provisions in the notes
- Include Depreceiation costs
- make sure the two periods comparing match

Front 14

What's Proforma Financial Statements, Invoices and bills?

Back 14

Forecasted Finanical Statements, Invoices and bills.

Front 15

What's an Extraordinary item?

Back 15

When something is accounted for outside the normal operations. For example: Wall hanging business sells land. The land is accounted for at the bottom of the Expenses i.e. Other Revenue: gain on Sale of Land.

Front 16

What's a marketable security?

Back 16

Any equity or debt instrument that it readily salable and can be converted into cash, or exchanged with ease. Stocks, bonds, short-term commercial paper and certificates of deposit are all considered marketable securities because there is a public demand for them and because they can be readily converted into cash.

Front 17

What's the materiality concept?

Back 17

The Materiality Concepts that insignificant events may be disregarded, but there must be full disclosure of all important information.

Front 18

1. Wat are Marketable Securities?
2. Where do they fall on the Balance sheet?

Back 18

1. Stocks & Bonds that the company owns in other firms, or the money markets/gov't

2. Under Current Assets or Assets that can be turned in to cash within 1 year.

Front 19

Name a non-marketable securities current asset? Hint: ____ & ____ equivalents

Back 19

Cash & cash equivalents

Front 20

What 2 things make up Equity on the Balance Sheet?

Back 20

1. Funds from Equity Investors
2. Retained Earnings

Front 21

What is the Dual Concept?

Back 21

How Assets are equal to Liabilities plus Equity (or A=L+E)

Front 22

How are the value of Monetary Assets reported? Provide a few examples.

Back 22

They are reported in terms of - - Fair value (current value) as opposed to all other Assets which are reported at cost.

- Cash, Cash Equivalents & Securities

Front 23

What are Current Liabilities?

Back 23

Obligations due within 1 year

Front 24

1. What makes up Retained Earnings?

2. Is the amount stated on the Statement only for the current period or cumulative to date?

Back 24

1. Net Earnings (Revenue - Variable & Fixed Costs) minus Dividends.

2. Retained Earnings on Financial Statements is the cumulative amount, not just the amount for the current period.

Front 25

1. Is Retained Earnings considered Cash?

2. Provide a definition for Retained Earnings.

Back 25

1. No

2. Capital generated by operating activities.

Front 26

What are the 3 qualifications for something to be considered an Entities Asset?

Back 26

1. Under its CONTROL (owned like land or a plant)

2. VALUABLE to the Entity/Company/Firm (owned equipment make use of)

3. Has a MEASURABLE COST (baseball contract)

Front 27

What is the money-measurement concept?

Back 27

That Accounting only reports on facts that can be expressed monetarily in terms of FAIR VALUE or COST.

Front 28

What are considered Inventory?

Back 28

All Finished and non-finished (raw materials & supplies) goods in posesion of the entity (Assets)

Front 29

1. Are a fire alarm and Insurance policy considered Assets?

2. If so what kind and why?

Back 29

1. Yes.

2. They are considered Current Assets because they're valuable to the entity, have a measurable cost and are under its control.

Front 30

What kind of Asset are buildings and trucks considered & why?

Back 30

Non-current Assets because they can't easily be turned in to cash within 1 year.

Front 31

1. Are Patents & rights (like ADVIL) considered Assets?

2. If so why and what kind?

Back 31

1. Yes

2. Intangible Assets because they are valuable, owned by the entity and have a measurable cost.

Front 32

What is Goodwill and how is it calculated?

Back 32

Goodwill is the extra amount paid for the purchase of another firm after subtracting the net of its Assets (Total Assets - Total Liabilities). For example:

Identifiable Assets = 1500
- liabilities = 500
= Net Assets = 1000

Price paid for it = 1400
- Net Assets = 1000
= Goodwill on Balance sheet = 400

Front 33

Are Prepaid Assets divided in to current and non- current Assets? Provide an example.

Back 33

No. Prepaid insurance covering 2 years is usually reported in current assets.

Front 34

What is the term for a written notice to repay someone for money borrowed?

Back 34

A Note

Front 35

What is it called when a transaction takes place in an entity or business and where is it recorded?

Back 35

An EVENT was recorded in the ACCOUNTING RECORDS

Front 36

1. Each transaction results in how many change(s)?
2. Does one have to always be on both sides of the Balance Sheet?
3. What is this called and provide an example?

Back 36

1. Two
2. No.
3. The Double entry system. Paying cash for raw goods (Inventories) decreases cash assets and boosts Inventory Assets (both on the Assets side of the Balance Sheet).

Front 37

Goodwill is only an asset when its been ___ ___. Provide an example.

Back 37

when its been PAID FOR. If someone gives you an offer to buy your equity stake in the entity, company or firm above the book value of your equity it cant be counted as goodwill unless you make the transaction (accept their offer for your equity).

Front 38

Which does an Income Statement cover, a period or point in time?

Back 38

A period of time or "flow" during that period

Front 39

Which does a Balance Statement cover, a period or point in time?

Back 39

A point in time or "amount" at a given point in time

Front 40

In a solely owned company where are the Retained Earnings on the Balance Sheet?

Back 40

In the Capital account i.e. Smithson, Capital $100K

Front 41

What are 3 other terms for profits and the one used for non-profits?

Back 41

Income, Earnings and Surplus. Surplus is used for non-profits.