Ethics
Formulas
Activities
Rules
Definition
100
Rules Based, Rules, exceptions, & bright-line tests, Avoid litigation, but there is risk of gaming the rules.
What is GAAP
100
(Cost - Salvage Value) / useful life years
What is Straight- line Depreciation
100
• Seller’s Expense • Seller’s Inventory • Seller’s Risk
What is FOB Destination
100
• Revenues are recognized when cash is received. • Expenses are recognized when cash is paid.
What is Cash Basis
100
Paid (prepaid) but not yet incurred.
What is Deferred Expenses
200
Principles Based, Professional judgment & achieving the objective, Loss of comparability
What is IFRS
200
( (1) / years of life ) * 2 = % % * Original Cost
What is Double- declining Depreciation
200
- Buyer’s Expense • Buyer’s Inventory • Buyer’s Risk
What is FOB Shipping Point
200
Revenues are recognized when earned. • Expenses are recognized when they help to produce a revenue
What is Accrual Basis?
200
Making and collecting loans. Acquiring and selling investments Acquiring and selling property, plant, and equipment.
What is Investing Activities
300
Earned but not yet collected or recorded.
What is Accrued Revenues
300
Current Assets / Current Liabilities
What is Current Ration
300
Reasons for differences between net income and associated cash receipts and payments.
What is statement of cash flows
300
Collected in advance but not yet earned.
What is Deferred Revenue
300
Obligations expected to be paid (liquidated) with current assets or the creation of other current liabilities within one year or the normal operating cycle, whichever is longer.
What is current liability
400
Incurred but not yet paid or recorded.
What is Accrued Expenses
400
Earned but not yet collected or recorded.
What is accrued revenue
400
Providing owners with a return on, and a return of, their investment.  Obtaining cash from creditors.  Repaying creditors for amounts borrowed.
What is Financing Activities
400
Cash or other assets expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.
What is current asset
400
Interest on both principal and unpaid accrued interest.
What is compound interest
500
Within one year or the normal operating cycle, whichever is longer.
What is current
500
Current Assets (minus prepaid and inventory) / Current liabilities
What is Quick Ratio
500
Ability to generate positive future net cash flows.
What is statement of cash flows
500
involve the cash effects of transactions that enter into the determination of net income, such as cash receipts from sales of goods and services and cash payments to suppliers and employees for acquisitions of inventory and expenses.
What is Operating Expenses
500
Accounting information that could influence the judgment and decisions of an informed user must be disclosed subject to the cost benefit constraint
What is Full disclosure principal
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