Accounting 221 Test 2

Front 1

Limitations of the balance sheet are?

Back 1

- Most assets (and liabilities) are reported at historical cost (not fair value)

- Judgments and estimates are made

- omits many items

Front 2

Correct order of 5 major current assets?

Back 2

Cash and Cash equivalents

Short Term Investments

Receivables

Inventories

Prepaid Expenses

Front 3

Three investment portfolios for ST investments?

Back 3

Trading, available for sale, and held-to-maturity

Front 4

Investments in Securities (bonds, common stock, long-term notes)

Back 4

LT investments

Front 5

Investments in tangible fixed assets (not currently used in operations: land held for speculation)

Back 5

LT investments

Front 6

Investments set aside in special funds (sinking, pension, plant expansions; Cash surrender value of life insurance)

Back 6

LT investments

Front 7

Investments in nonconsolidated subsidaries or affiliated companies

Back 7

LT investments

Front 8

____ are physical proprty such as timberland, oil and gas, minerals and re depleted over time

Back 8

Wasting resources

Front 9

All ____ and ____ are to be reported at fair value (ST investments)

Back 9

Trading and Available-for-sale securities

Front 10

_____ securities should always be reported as current assets

Back 10

Trading

Front 11

3 componenes for inventory for manufacturing companies?

Back 11

Finished Goods, Work in Process, Raw materials

Front 12

Resources that lack physicl substance but provide economic rights and advantages (patents, franchises, copywrights, goodwill, trademarks, trade names, and licenses)

Back 12

Intangible Assets

Front 13

Limited life intangible assets are _____ over their useful lives

Back 13

amoritized

Front 14

indefinite life intangible assets, such as goodwill, are not amortized but are assessed periodically for _____

Back 14

impairment

Front 15

SE 6 parts:

Back 15

Capital Stock

Additional paid in capital

Retained earnings

Accumulated Other Comprehensive Income

Treasury Stock

Non-Controlling Interest/Minority Interest

Front 16

Treasury Stock is shown as a ____ of ____

Back 16

reduction of SE

Front 17

For Capital Stock, companies must disclose the ____ and the _____, _____ and ____ share amounts

Back 17

par value and the authorized, issued, and outsanding share amounts

Front 18

_____ form - assets on left side of page, Liabilitys and SE on right side

Back 18

Account

Front 19

____ form - assets on top, Liabilities and SE below

Back 19

Report

Front 20

THe amount is deducted from the account it relates to

Back 20

Contra items

Front 21

The amount is added to the account it reates to

Back 21

Adjunct items

Front 22

The primary purpose of ____ is to provdide info about the cash receipts and cash payments of an enterprise during a period

Back 22

S of CF

Front 23

The S of CF provides answers to which questions?

Back 23

Where did Cash come from?

What was Cash used for

What was the change in Cash Balance?

Front 24

What are the 3 different activities in the S of CF?

Back 24

Operating, Investing, Financing

Front 25

First step of S of CF?

Back 25

Determine cash provided or used in OA

Front 26

Second step of S of CF?

Back 26

Determine cash provided or used in IA and FA

Front 27

Third Step of S of CF

Back 27

Determine Change in cash

Front 28

Last step of S of CF?

Back 28

Reconcile change in cash with beginning and ending cash balances

Front 29

What method starts with net income and makes adjustments from the accrual basis to the cash basis?

Back 29

Indirect

Front 30

Which method shows the detail of the cash receipts and cash payments?

Back 30

Direct

Front 31

Material events that have an uncertain outcome; an unexisting situation involving uncertainty as to possible gain or loss that will ultimately be resolved when one or more future events occur or fail to occur

Back 31

Contengencies

Front 32

US GAAP recommends disclosure of all _____ and methods that involve selection from among alternatives and/or those that are peculiar to a given industry; usually given in the first note

Back 32

Significant accounting principles

Front 33

What are the four techniques of disclosure?

Back 33

Parenthetical explanations, notes, cross-reference, and supporting schedules

Front 34

Provides additional information about an item following the item; adds clarity and completeness, brings additional information into the body of the statement - less likely to be overlooked than a Note

Back 34

Parenthetical explanation

Front 35

Used if additional explanations cannot be shown conveniently as parenthetical explanations

Back 35

Notes

Front 36

Example of Cross-reference?

Back 36

"See Current Liabilities"

Front 37

Are used to present more detailed information about certain assets or liabilities instead of just a single summary (line) item

Back 37

Supporting Schedules

Front 38

When the amount is deducted from the account it relates to

Back 38

Contra items

Front 39

When the amount is added to the account it relates to

Back 39

Adjunct accounts