Assets
What are assets?
Resources controlled as a result of past events and from which future economic benefits are expected to flow
What are liabilities?
Present obligations arising from past events, the settlement of which is expected to result in outflow of resources embodying economic benefits
What is the objective of financial reporting?
Provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity
Which one is less standardized: financial accounting or managerial accounting?
Managerial accounting
When should an asset be recognized?
An asset is recognised when:
1.it is probable that any future economic benefit associated with the item will flow to the entity; and
2.the item has a cost or value that can be measured with reliability.
Which one is a current asset? Intangibles, Raw materials, Reserves
Raw materials
Which one is a liability: Retained earnings; dividends payable or accumulated depreciation?
Dividends payable?
In which component of the financial statement can one see the performance of a company?
In the profit and loss account
Which one has most likely reports available to the public: financial accounting or managerial accounting?
Financial accounting
What is the opposite of the accrual concept?
The cash basis
What kind of elements are Trade receivables?
Current assets
The liability created when coffee beans are purchased on credit from suppliers is a/an: accounts payable, expense, loss
Accounts payable
In which component of the financial statement can one see the financial position of a company?
In the statement of the financial position (balance sheet)
The accruals concept is
an accounting concept that requires transactions to be recorded in the time period in which they occur, regardless of when the actual cash flows for the transaction are received
If I sell in 2020 a car and I receive the price in 2021, in the cash flow statement of the year 2020 I'll have
0 cash inflows
When the estimated price of the inventory on the market decreases, the company will
Record an impairment: it decreases the value of the inventory and recognize an expense
Your company is being sued you for penalties. It's probably you'll loose $100. Is there a liabilities to be recognized?
Yes, a provisions
In which component of the financial statement can one see the cash received or paid by a company?
Cash Flow statement
Different accounting methods lead to different results. True or false?
True
If I sell in 2020 a car and I receive the price in 2021, in the profit and loss statement of the year 2020 I'll have
A gain for the selling price of the car minus the net carrying value
Your company is suing a supplier. You're sure you'll win. Is there an asset to be recognized?
No, it is a contingent asset that can not be recognized
True or false? Provisions are liabilities with a significant uncertainty attaches.
True
Which are the sections of the cash flow statement?
Operating, Investing and Financing Cash Flows
The market price of the finish goods increased above the initial cost. Can a gain be recognized?
Nope. Unrealized gains can not be recognized for inventory above their initial cost.
The fair value of a building (an item of PPE) increased above its initial cost. Can the gain be recognized by the company?
Only if the company uses the revaluation method to present the fixed assets.