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Summary Financial accounting : international financial reporting standards.

- Walter T Harrison, et al
ISBN-10 9810684576 ISBN-13 9789810684570
172 Flashcards & Notes
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A snapshot of the summary - Financial accounting : international financial reporting standards. Author: Walter T Harrison Charles T Horngren ISBN: 9789810684570

  • 1 Conceptual Framework and Financial Statements

  • What does a income statement represent?

    1. Revenues

    • Net sales
    • Other income revenues

    2. Expenses

    • Cost of goods sold
    • Selling, general and administrative expenses
    • Depreciation, amortization and provisions.
    • Non-recurring income and expenses
    • Finance costs, or interest expenses (the cost of borrowing money)
    • Income tax expense.
  • What does the statement of financial position represent?

    1. Assets

    • Cash and cash equivalents
    • Trade receivables
    • Inventories
    • Other current assets
    • Total current assets
    • Property, plant and equipment
    • Intangible assets
    • Other non-current assets
    • Total non-current assets
    • Total assets

    2. Liabilities

    • Trade payable
    • Tax payable
    • Borrowings - short-term
    • Other current liabilities
    • Total current liabilities
    • Borrowing - long-term
    • Other non-current liabilities
    • Total non-current liabilities
    • Total liabilities

    3. Shareholder's equity

    • Capital
    • Retained earning, reserves and others
    • Total shareholder's equity
    • Total liabilities and shareholder's equity.
  • Which questions should you ask in an ethical analysis?

    1. Which options are most honest, open, and truthful?
    2. Which options are most kind, compassionate, and build a sense of community?
    3. Which options create the greatest good for the greatest number of stakeholders?
    4. Which options result in treating others as I would want to be treated?
  • 5 Short Term Investements & Receivables

  • What are trading securities?

    Trading securities are share investments that are expected to be sold in the near future with the intent of generating profits on the sale.

  • What is a note receivable?

    A written promise to pay the lender a definite sum at the maturity date, plus interest.

  • The Aging-of-receivables method is ... 

    a way to estimate bad debts by analyzing individual accounts receivable according to the length of time they have been receivable from the customer.

  • How to write of uncollectible accounts?

    1. Debit accounts receivable

    2. Credit Allowance for doubtful receivables.

  • How to recover previously written-off receivables?

    1. Reverse write of entry OR

    2. Decrease bad debt expense

  • What is the direct write-off method?

    A method of accounting for bad debts in which the company waits until a customer's account receivable proves uncollectible and then debits uncollectible-account expense and credits the customers accounts receivable.

  • The Acid-test ratio is calculated by ...

    (Cash + short-term investments + net current receivables) / Total current liabilities = acid-test ratio.

    The higher the acid-test ratio, the easier it is to pay current liabilities.

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