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Income statement accounting correct answers Accrual - revenues & costs recorded as a business
earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as closely as
possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY OF
GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? correct answers Accounting differences
The idea of matching over time correct answers
CFS Accounting correct answers Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method correct answers record income and expenditures at the time the money
changes hands
Cash accounting method correct answers An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting correct answers recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting correct answers reporting income when it is earned and expenses
when they are incurred
,Accrual Basis Accounting correct answers the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting correct answers Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial statements,
even if cash was not exchanged.
accrued expenses correct answers expenses incurred in one fiscal period but not paid until a later
fiscal period
accrued expenses correct answers expenses incurred but not yet paid in cash or recorded
Cash flow from operating activities correct answers The net amount of cash provided from
operating activities.
cash flow from financing activities correct answers
The idea of matching over time correct answers
CFS Accounting correct answers Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method correct answers record income and expenditures at the time the money
changes hands
Cash accounting method correct answers An accounting method in which income and
expenditures are recorded at the time the money changes hands.
,Accrual Accounting correct answers recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting correct answers reporting income when it is earned and expenses
when they are incurred
Accrual Basis Accounting correct answers the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting correct answers Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial statements,
even if cash was not exchanged.
accrued expenses correct answers expenses incurred in one fiscal period but not paid until a later
fiscal period
accrued expenses correct answers expenses incurred but not yet paid in cash or recorded
Cash flow from operating activities correct answers The net amount of cash provided from
operating activities.
cash flow from financing activities correct answers The section of the statement of cash flows
that reports cash flows from transactions affecting the equity and debt of the business.
cash flow from financing activities correct answers items related to debt, dividends, and issuing
or repurchasing shares
cash flow from investing activities correct answers The section of the statement of cash flows
that reports cash flows from transactions affecting investments in noncurrent assets.
, cash flow from investing activities correct answers involves any cash in or out of the company
due to investment in or disposal of fixed assets.
Contributed surplus correct answers Amount paid for shares in excess of their par value
Contributed surplus correct answers money that has been invested in the firm by outside parties
Contributed surplus correct answers A source of contributed capital that can result from certain
types of equity transactions, including the reacquisition of shares.
Straightline depreciation correct answers Allocates equal amounts of plant assets net cost to
depreciation during its useful life.
Accounts Receivable correct answers Amounts to be received in the future due to the sale of
goods or services
Accounts Payable correct answers Amounts to be paid in the future for goods or services already
acquired
Cash Flow Accounting System correct answers An accounting system entering expenses and
revenues only when cash is received or paid out.
authorised share capital correct answers Maximum number of shares that a company can issue,
as specified in the firm's memorandum of association
outstanding share capital correct answers Issued share capital less the par value of shares that are
held in the company's treasury.
inventory correct answers the quantity of goods that a firm has on hand
Income statement accounting correct answers Accrual - revenues & costs recorded as a business
earns or incurs them, not as it receives and pays money
It includes them in the relevant period's income statement and matches them as closely as
possible
CF makes no difference whatsoever - IS where sale happens
=> How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY OF
GOOD/SERVICE PERFORMED
Why are profits and cash flow not the same thing? correct answers Accounting differences
The idea of matching over time correct answers
CFS Accounting correct answers Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method correct answers record income and expenditures at the time the money
changes hands
Cash accounting method correct answers An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting correct answers recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting correct answers reporting income when it is earned and expenses
when they are incurred
,Accrual Basis Accounting correct answers the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting correct answers Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial statements,
even if cash was not exchanged.
accrued expenses correct answers expenses incurred in one fiscal period but not paid until a later
fiscal period
accrued expenses correct answers expenses incurred but not yet paid in cash or recorded
Cash flow from operating activities correct answers The net amount of cash provided from
operating activities.
cash flow from financing activities correct answers
The idea of matching over time correct answers
CFS Accounting correct answers Only records transactions when cash is received
VS
IS records ALL revenues earned, whether in cash or accrued
Cash accounting method correct answers record income and expenditures at the time the money
changes hands
Cash accounting method correct answers An accounting method in which income and
expenditures are recorded at the time the money changes hands.
,Accrual Accounting correct answers recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting correct answers reporting income when it is earned and expenses
when they are incurred
Accrual Basis Accounting correct answers the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting correct answers Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial statements,
even if cash was not exchanged.
accrued expenses correct answers expenses incurred in one fiscal period but not paid until a later
fiscal period
accrued expenses correct answers expenses incurred but not yet paid in cash or recorded
Cash flow from operating activities correct answers The net amount of cash provided from
operating activities.
cash flow from financing activities correct answers The section of the statement of cash flows
that reports cash flows from transactions affecting the equity and debt of the business.
cash flow from financing activities correct answers items related to debt, dividends, and issuing
or repurchasing shares
cash flow from investing activities correct answers The section of the statement of cash flows
that reports cash flows from transactions affecting investments in noncurrent assets.
, cash flow from investing activities correct answers involves any cash in or out of the company
due to investment in or disposal of fixed assets.
Contributed surplus correct answers Amount paid for shares in excess of their par value
Contributed surplus correct answers money that has been invested in the firm by outside parties
Contributed surplus correct answers A source of contributed capital that can result from certain
types of equity transactions, including the reacquisition of shares.
Straightline depreciation correct answers Allocates equal amounts of plant assets net cost to
depreciation during its useful life.
Accounts Receivable correct answers Amounts to be received in the future due to the sale of
goods or services
Accounts Payable correct answers Amounts to be paid in the future for goods or services already
acquired
Cash Flow Accounting System correct answers An accounting system entering expenses and
revenues only when cash is received or paid out.
authorised share capital correct answers Maximum number of shares that a company can issue,
as specified in the firm's memorandum of association
outstanding share capital correct answers Issued share capital less the par value of shares that are
held in the company's treasury.
inventory correct answers the quantity of goods that a firm has on hand
