Notes on Financial Statements and CPA Examination

Vocabulary flashcards covering key concepts related to financial statements and accounting principles for the CPA Examination.

Notes to Accounts

Additional information and explanations accompanying financial statements to enhance understanding.

Significant Accounting Policies

Principles and methods used to prepare financial accounts, including depreciation, inventory valuation, and revenue recognition.

Related Parties

Individuals or entities closely connected to the reporting entity that can influence its decisions.

Subsequent Events

Events that occur after the balance sheet date affecting the financial statements, categorized into recognized or non-recognized.

Going Concern Assumption

A fundamental accounting principle that presumes an entity will continue operating in the foreseeable future.

Risks and Uncertainties

Disclosure of potential future events that may negatively impact a company’s financial position or performance.

Accrued Liabilities

Liabilities that have been incurred but not yet paid or recorded.

Fair Value of Financial Instruments

The estimated amount at which a financial instrument could be exchanged in a current transaction.

Contingencies

Potential liabilities that may occur, depending on the outcome of a future event.

Business Combinations

Transactions where two or more entities consolidate to operate as a single entity.