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A snapshot of the summary - Financial accounting : international financial reporting standards.
1 Conceptual Framework and Financial Statements
What does a income statement represent?
- Net sales
- Other income revenues
- 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?
- Cash and cash equivalents
- Trade receivables
- Other current assets
- Total current assets
- Property, plant and equipment
- Intangible assets
- Other non-current assets
- Total non-current assets
- Total assets
- 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
- Retained earning, reserves and others
- Total shareholder's equity
- Total liabilities and shareholder's equity.
Which questions should you ask in an ethical analysis?
- Which options are most honest, open, and truthful?
- Which options are most kind, compassionate, and build a sense of community?
- Which options create the greatest good for the greatest number of stakeholders?
- 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.