Intermediate accounting Chapters 3 and 4
Accounting Error - ANS-Correct if in this year, if prior year-RE
\accounts receivable - ANS-customers
\Acid test (quick) Ratio - ANS-Quick assets includes all current assets except inventories and
prepaid. Quick Assets divided by current liab.
\Auditors Report - ANS-management responsible for financials. Unqualified, qualified, adverse,
and disclaimer.
\Balance Sheet - ANS-statement of financial position
\Cash and cash Equivalents - ANS-cash on hand, cash in bank, CD, etc
\Change in Accounting Estimate - ANS-not usual, do not change previous years- just from this
point on
\change in reporting equity - ANS-if company A and B merge, Restate all prior year statements
included in financials
\Comprehensive Inc - ANS-reported at the bottom of income state of its own statement
\Current Assets - ANS-converted or considered within a year. listed in order of liquidity.
\current liab - ANS-to be paid within one year or operating cycle
\current ratio - ANS-current assets divided by current liab.
\earnings per share (EPS) - ANS-start at income from continuing operations / shares of
commons stock. each category from that point on until final net income/shares of common.
\Equity - ANS-also called Net Assets. Owners share of the assets
\exceptions - ANS-current portion of LT debt in current. if current liab is going to be refinanced
with LT debt - list as LT. "Intent and ability"
\Financial disclosure - ANS-critical to understanding.
\Full Disclosure - ANS-requires all material, relevant information concerning entity be disclosed
\intangible assets - ANS-patents, copyrights, franchises
\Investments - ANS-land for speculation, non current receivables, sinking fund
\Liabilities - ANS-amount owed to others. listed liquidity in order
\Management Discussion and analysis - ANS-views on events, trends, and uncertainties
pertaining to operations, liquidity, and resources. will also report on internal control
\Matching Principal - ANS-revenues when earn, expenses when incurred in period belong
\Multi-step income statement - ANS-more complex income statement
\non-trade receivable - ANS-loan or advance within company
\notes receivable - ANS-formula written agreement
\plant, property, equipment - ANS-cost and subtract accumulated depr.
\Proxy Statement - ANS-election of board members. 1992 (SOX)- must include Executive pay,
benefits, and options- compensation package
\revenue recognition - ANS-when earned and reasonably certain of Collect ability
\Short term investments - ANS-temporary or marketable securities, intended to sell within a year
or operating cycle
\single step income statement - ANS-all revenues and gains, all expenses and losses, = net
income
Accounting Error - ANS-Correct if in this year, if prior year-RE
\accounts receivable - ANS-customers
\Acid test (quick) Ratio - ANS-Quick assets includes all current assets except inventories and
prepaid. Quick Assets divided by current liab.
\Auditors Report - ANS-management responsible for financials. Unqualified, qualified, adverse,
and disclaimer.
\Balance Sheet - ANS-statement of financial position
\Cash and cash Equivalents - ANS-cash on hand, cash in bank, CD, etc
\Change in Accounting Estimate - ANS-not usual, do not change previous years- just from this
point on
\change in reporting equity - ANS-if company A and B merge, Restate all prior year statements
included in financials
\Comprehensive Inc - ANS-reported at the bottom of income state of its own statement
\Current Assets - ANS-converted or considered within a year. listed in order of liquidity.
\current liab - ANS-to be paid within one year or operating cycle
\current ratio - ANS-current assets divided by current liab.
\earnings per share (EPS) - ANS-start at income from continuing operations / shares of
commons stock. each category from that point on until final net income/shares of common.
\Equity - ANS-also called Net Assets. Owners share of the assets
\exceptions - ANS-current portion of LT debt in current. if current liab is going to be refinanced
with LT debt - list as LT. "Intent and ability"
\Financial disclosure - ANS-critical to understanding.
\Full Disclosure - ANS-requires all material, relevant information concerning entity be disclosed
\intangible assets - ANS-patents, copyrights, franchises
\Investments - ANS-land for speculation, non current receivables, sinking fund
\Liabilities - ANS-amount owed to others. listed liquidity in order
\Management Discussion and analysis - ANS-views on events, trends, and uncertainties
pertaining to operations, liquidity, and resources. will also report on internal control
\Matching Principal - ANS-revenues when earn, expenses when incurred in period belong
\Multi-step income statement - ANS-more complex income statement
\non-trade receivable - ANS-loan or advance within company
\notes receivable - ANS-formula written agreement
\plant, property, equipment - ANS-cost and subtract accumulated depr.
\Proxy Statement - ANS-election of board members. 1992 (SOX)- must include Executive pay,
benefits, and options- compensation package
\revenue recognition - ANS-when earned and reasonably certain of Collect ability
\Short term investments - ANS-temporary or marketable securities, intended to sell within a year
or operating cycle
\single step income statement - ANS-all revenues and gains, all expenses and losses, = net
income
