Overview of Corporate Financial Reporting

Flashcards covering key terms and concepts from the Overview of Corporate Financial Reporting lecture.

Financial Accounting

The process of capturing, analyzing, and reporting transaction information to financial statement users.

Statement of Income

Presents the results of a company’s operating activities for a month, quarter, or year; formulated as Revenues – Expenses = Profit (Net Income).

Liquidity

Refers to how quickly something will be received, realized, consumed, settled, or paid.

Assets

Resources controlled by the entity, expected to provide future economic benefits.

Liabilities

Present obligations of the entity expected to settle through an outflow of resources.

Shareholders’ Equity

The value of the shareholders’ interest in the company, usually composed of share capital and retained earnings.

Operating Activities

These activities are related to the company's revenues and expenses, including sales and customer collections.

Investing Activities

Involves buying and selling of property, plant, and equipment as well as shares of other companies.

Financing Activities

Cash inflows and outflows related to raising capital and returning funds to investors.

Annual Report

A report that summarizes a company's activities and financial performance over the past year.

Accounting Equation

Assets = Liabilities + Shareholders Equity; it represents the fundamental relationship in accounting.

Prepaid Expenses

Payments made for expenses that will benefit future periods, treated as assets until used.

Retained Earnings

Earnings kept in the company and not paid out as dividends, calculated as Opening Retained Earnings + Profit - Dividends.

Statement of Financial Position

Also known as the balance sheet, it shows the financial status of a company at a specific point in time.

Statement of Changes in Equity

Displays the changes in each component of shareholders' equity during the period.