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32 Cards in this Set
- Front
- Back
Report that measures success of company for given time period |
Income statement |
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Income statement helps users of financ stmts to... |
Eval past and predict future performance, assess risk or uncertainty of achieving future cash flow |
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Limits of income stmt |
Comp omit unmeasurable items; acct methods used affect income numbers; inc measuremt involves judgment |
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Planned timing of revenues, expenses, gains and loss to smooth out earnings; decrease current earning to increase income in future |
Earnings management |
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Affected negatively by earnings mgmt; trust from users that info is more useful for predicting future earning and cash flows |
Quality of earnings |
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Method of income measurement that focuses on inc-related activ that occurred during period |
Transaction approach |
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Inflows, enhancemt of assets or settlement of liab from deliver good or service |
Revenue |
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Outflow, use up of asset or incur liab from producing goods/service |
Expense |
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Increase in equity from peripheral transactions EXCEPT those resulting from revs or investmt by owners |
Gain |
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Decreases in equity from peripheral transactions EXCEPT those resulting from exp or distribut to owners |
Losses |
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Stmt including oper section, non-oper section, income tx, disc oper, non-control interest and EPS |
Multi-step Income stmt |
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Report of Revs and Exps of principal ops; sales or revs, COGS, Sell/admin exps |
Operating section |
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Report of revs/exps from co’s secondary activity; Other revs/G, Other exps/L |
Nonoperating section |
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Section to report fed/state tax on cont ops |
Income tax |
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Material G/L from disposing of component of comp |
Discontinued operations |
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Allocate income to noncontrolling shareholders |
Noncontrolling interest |
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Measure of performance over reporting period |
Earnings per share |
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Stmt consist of two groups: revs and exps; adv- simple present, no rev or exp has priority |
Single-step income stmt |
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Reporting only on regular and recurring revs and exps |
Current operat performance approach |
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Reporting most items, including unusual events as part of income; incl. unusual/infreq G/L, disc ops, non-control int, EPS |
Modified all-inclusive concept |
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When comp eliminates component ops of business (cash flow clearly set apart) OR eliminates component to rep a strategic shift with major effect |
Discontinued operations |
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Allocation of tax w/i income statement of a period; recognizes income tax as a real expense |
Intraperiod tax allocation |
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Portion of equity interest in subsid NOT attribut to parent comp |
Noncontrolling interest |
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Net income-pref div (dec/cumul) divided by common shares outstanding |
EPS |
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Change in reporting, retroactive |
Change in acct principle |
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Change in acct, prospective, don’t reflect errors; doesn’t affect R/E |
Change in acct estimates |
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Change in acct, requiring PPA; net of tax; some wash, not all |
Correction in errors |
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Amount of r/e restricted transferred to an account; two separate amounts- R/E free, R/E appropr- total equals R/E |
Appropriated R/E |
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All changes in equity except those resulting from investmt by owner or distrib to owner |
Comprehensive income |
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Non-owner changes in equity that bypass income stmt |
Other comp income |
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Stmt of changes in S/E; contribut and distrib to owners, reconciling of carrying amt of each component from beg to end |
Stmt of S/E |
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Beg balance plus unrealized, net of tax; listed on Balance sheet after R/E |
Accumulated other comp inc |