Financial Statements and Reporting

These flashcards cover key concepts related to financial statements, accounting principles, and specific terminology essential for understanding financial reporting.

Statement of Financial Position

Also known as the balance sheet, it provides a summary of a company's assets, liabilities, and equity.

Classified Balance Sheet

A financial statement that separates current and non-current assets and liabilities.

Cost of Goods Sold (COGS)

The expense that inventory costs become when sold.

Insurance Expense

The expense related to unexpired (prepaid) cost of insurance as it expires.

Depreciation Expense

The expense related to the net book value of fixed assets as they are utilized over time.

Amortization Expense

The expense that unexpired costs of patents turn into as they expire.

Gains and Losses

Reported at their net amounts, calculated as the difference between sale proceeds and the net book value of disposed assets.

Multiple-Step Income Statement

An income statement that separately reports operating revenues and expenses from nonoperating revenues and expenses.

Discontinued Operations

Operations that must consist of a significant strategic shift that has or will have a major effect on an entity's financial results.

Foreign Currency Transactions

Transactions that occur in a currency other than the functional currency of the reporting entity.

Comprehensive Income

The change in equity from transactions and other events not involving owner sources.

Other Comprehensive Income

The components of comprehensive income not included in net income, such as foreign currency translation adjustments.

Earnings Per Share (EPS)

A measure of a company's profit allocated to each outstanding share of common stock.

Antidilution Rule

Any conversion or contingent issuance that has an antidilutive effect is not included in EPS calculation unless actually converted or exercised.

Treasury Stock

Stock that has been repurchased by the issuing company; recorded at cost and not an asset.

Preferred Stock

A class of stock that has a higher claim on assets and earnings than common stock and may have no voting rights.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Small Stock Dividend

A stock dividend of less than 20-25% of the total shares outstanding.

Large Stock Dividend

A stock dividend of more than 20-25% of the total shares outstanding.