Intermediate Accounting - Financial Position and Cash Flows

A set of vocabulary flashcards derived from notes on the statement of financial position and cash flows, highlighting key accounting terms and concepts.

Statement of Financial Position

Also known as the balance sheet, it provides information about a company's assets, liabilities, and equity at a specific point in time.

Liquidity

The ability of a company to convert its assets into cash quickly to meet short-term obligations.

Solvency

The ability of a company to meet its long-term debts and financial obligations.

Earnings Quality

An assessment of the true economic performance of a company based on the relationship between net income and cash flows.

Disclosure Techniques

Methods used to provide additional information that is not presented on the face of the financial statements, aimed at enhancing user understanding.

Cash Flow Statement

A financial report that provides information about the cash inflows and outflows from operating, investing, and financing activities over a period.

Current Assets

Assets that are expected to be converted to cash or consumed within one year or within the company's operating cycle.

Monetary Items

Assets and liabilities that have fixed or determinable amounts and can be easily measured in monetary terms.

Non-monetary Items

Assets and liabilities that do not have fixed values and are often subject to valuation uncertainty.

Financial Instruments

Contracts that create financial assets for one party and financial liabilities or equity instruments for another, often requiring fair value accounting.

Working Capital

The difference between total current assets and total current liabilities, indicating a company's short-term financial health.

Free Cash Flow

Cash generated from operations minus capital expenditures and dividends, indicating the amount available for investment, debt repayment, or dividends.