The Financial Statements quiz #5 Flashcards
The Financial Statements quiz #5
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What is the meaning of 'statement of changes in equity'?
'Statement of changes in equity' is another term for the statement of stockholders' equity, showing changes in equity accounts over a period. What is the meaning of 'statement of retained earnings'?
'Statement of retained earnings' shows changes in retained earnings, including net income and dividends, over a period. What is the meaning of 'statement of financial position'?
'Statement of financial position' is another term for the balance sheet. What is the meaning of 'statement of operations'?
'Statement of operations' is another term for the income statement. What is the meaning of 'statement of cash flows'?
'Statement of cash flows' shows cash inflows and outflows from operating, investing, and financing activities over a period. What is the meaning of 'operating activities' in the statement of cash flows?
'Operating activities' are the primary revenue-generating activities of the business. What is the meaning of 'investing activities' in the statement of cash flows?
'Investing activities' involve the purchase and sale of long-term assets and investments. What is the meaning of 'financing activities' in the statement of cash flows?
'Financing activities' involve transactions with owners and creditors, such as issuing stock or borrowing money. What is the meaning of 'cash equivalents'?
'Cash equivalents' are short-term, highly liquid investments that are readily convertible to cash. What is the meaning of 'restricted cash'?
'Restricted cash' is cash that is not available for general use because it is set aside for a specific purpose. What is the meaning of 'bank overdraft'?
'Bank overdraft' is a liability that occurs when withdrawals exceed the available balance in a bank account. What is the meaning of 'noncontrolling interest'?
'Noncontrolling interest' is the portion of equity in a subsidiary not owned by the parent company. What is the meaning of 'minority interest'?
'Minority interest' is another term for noncontrolling interest. What is the meaning of 'consolidated financial statements'?
'Consolidated financial statements' present the financial position and results of a parent company and its subsidiaries as a single entity. What is the meaning of 'segment reporting'?
'Segment reporting' is the disclosure of financial information for different business segments within a company. What is the meaning of 'related party transactions'?
'Related party transactions' are transactions between the company and its related parties, such as affiliates or key management. What is the meaning of 'subsequent events'?
'Subsequent events' are events that occur after the balance sheet date but before the financial statements are issued. What is the meaning of 'contingent liabilities'?
'Contingent liabilities' are potential obligations that depend on the outcome of future events. What is the meaning of 'commitments' in financial statements?
'Commitments' are agreements to carry out future transactions that may affect the company's financial position. What is the meaning of 'materiality' in financial reporting?
'Materiality' is the significance of financial information in influencing users' decisions. What is the meaning of 'comparability' in financial reporting?
'Comparability' is the quality that allows users to identify similarities and differences between financial statements of different companies. What is the meaning of 'consistency' in financial reporting?
'Consistency' is the use of the same accounting methods over time to allow for meaningful comparisons. What is the meaning of 'reliability' in financial reporting?
'Reliability' is the quality of information that assures users it is free from error and bias. What is the meaning of 'relevance' in financial reporting?
'Relevance' is the quality of information that makes it useful for decision-making. What is the meaning of 'faithful representation' in financial reporting?
'Faithful representation' means financial information accurately reflects the economic substance of transactions. What is the meaning of 'full disclosure' in financial reporting?
'Full disclosure' is the requirement to provide all information necessary for users to understand the financial statements. What is the meaning of 'going concern' assumption?
'Going concern' is the assumption that a company will continue to operate in the foreseeable future. What is the meaning of 'historical cost' principle?
'Historical cost' principle requires assets to be recorded at their original purchase price. What is the meaning of 'fair value' in accounting?
'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction. What is the meaning of 'conservatism' in accounting?
'Conservatism' is the practice of reporting the least optimistic figures when faced with uncertainty. What is the meaning of 'matching principle'?
'Matching principle' requires expenses to be recorded in the same period as the related revenues. What is the meaning of 'revenue recognition principle'?
'Revenue recognition principle' requires revenue to be recognized when it is earned and realizable. What is the meaning of 'accrual basis accounting'?
'Accrual basis accounting' records revenues and expenses when they are earned or incurred, regardless of when cash is received or paid. What is the meaning of 'cash basis accounting'?
'Cash basis accounting' records revenues and expenses only when cash is received or paid. What is the meaning of 'GAAP'?
'GAAP' stands for Generally Accepted Accounting Principles, which are the rules and standards for financial reporting in the United States. What is the meaning of 'IFRS'?
'IFRS' stands for International Financial Reporting Standards, which are global accounting standards. What is the meaning of 'external users' of financial statements?
'External users' are individuals or entities outside the company who use financial statements, such as investors, creditors, and regulators. What is the meaning of 'internal users' of financial statements?
'Internal users' are individuals within the company, such as management and employees, who use financial information for decision-making. What is the meaning of 'audited financial statements'?
'Audited financial statements' are financial statements that have been examined by an independent auditor for accuracy and compliance. What is the meaning of 'notes to the financial statements'?
'Notes to the financial statements' provide additional information and explanations about items in the financial statements.
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