Financial Reporting

These flashcards cover key concepts related to financial reporting, cost of sales, components of financial statements, and types of assets in accounting.

What is financial reporting?

Financial reporting is a way of recording, analyzing, and summarizing transactions on a business.

What does cost of sales represent?

Cost of sales represents the costs incurred to produce the goods that were sold.

What is closing inventory?

Closing inventory is the unsold stock that needs to be removed from the state of profit or loss and transferred to the balance sheet.

What is included in the statement of financial position?

The statement of financial position includes a list of all the assets owned and all the liabilities owed by a business at a particular date.

What are noncurrent assets?

Noncurrent assets are assets that are expected to be held in the business for more than twelve months.

Give examples of noncurrent assets.

Examples of noncurrent assets include land and buildings, office equipment, motor vehicles, and fixtures and fittings.

What is sundry income?

Sundry income includes various forms of income received, such as bank interest or discounts from suppliers.

What obligation arises from a past event in accounting?

An obligation arises when a business has incurred a liability to pay for goods or services received.