Classifying account into financial statement element
5 classes: Asset Liability Equity Revenue Expense Assets: company’s economic resource Cash and cash equivalent Accounts receivable: have “allowance for bad debt” as contra accounts …
CFA
Relationship between FS elements and accounts
Accounts are elements of financial statement Financial statement elements (4) Major classification Assets Liabilities Owner’s equity Revenue Expense Account (5) Account is record within each …
Classifying business activity for financial reporting purposes
Business activities are classified as: Operating activities (1) Ordinary course of business (producing, selling goods) short-term Investing activities (2) Buying or selling long-term asset such …
Steps in financial statement analysis framework
Financial statement analysis framework consists of 6 steps: 1: State the objectives and context Question to seek answer Resource and time available to perform the …
Information source for financial statement
Quarterly and semiannual reports Report events such as acquisition, disposals of major assets Update the major financial statement and footnotes but not necessarily audited SEC …
Audits of financial statements
Audit (13) Definition Independent review of entity’s financial statement Objectives To provide an opinion on fairness and reliability of the financial statements The auditor Examine …
Importance of other information: FS notes, supplementary,…
Financial statement notes (10) Footnotes Provide further details about information summarized in financial statement Accounting methods Uncertainty of the estimates Assumption Help users improve assessment …
Roles of statement in evaluating a company’s performance and financial position
Statement of financial position or balance sheet (2) Report firm’s financial position at a point of time Consist of 3 elements Assets (3) Resource controlled …
Roles of financial reporting and financial statement analysis
Financial reporting (1) is the way to Show financial performance to investor, creditor, interest parties Provide Financial information to investors, lenders and other creditors in …