Cash Flow Statement
Indicate Investing, Financing or Operating AND write a + or - to show the flow of cash.
Purchase of a Thing-A-Majig machine.
Investing +
A person or organization to whom debt is owed.
Creditor
A person or organization to whom debt is owed.
Business Entity
White Company’s assets total $780,000 and its owners’ equity consists of capital stock of $500,000 and retained earnings of $150,000. What is the total amount of its liabilities?
130,000
The Father of Accounting
Luca Pacioli
Indicate Investing, Financing or Operating AND write a + or - to show the flow of cash.
Sale of Capital Stock
Financing +
Transferable units of ownership in a corporation.
Capital Stock
An assumption by accountants that a business will operate in the foreseeable future unless specific evidence suggests that this is not a reasonable assumption.
Going Concern
This statement represents an expansion of the accounting equation and explains the various categories of assets, liabilities, and owners’ equity.
Balance sheet OR Statement of Financial position
FBI accountants played a huge part in bringing down this gangster.
Al Capone
Indicate Investing, Financing or Operating AND write a + or - to show the flow of cash.
Provided services on account.
Not included on the CF Statement
Measures taken by management specifically intended to make a business look as strong as possible in its balance sheet, income statement, and statement of cash flows.
Window Dressing
An assumption by accountants that the monetary unit used in the preparation of financial statements changes at a sufficiently slow rate that the resulting impact on financial statements does not distort the information.
Stable-dollar (assumption)
CASH BALANCE IS?
Earned revenues of $100,000
Incurred expenses of $56,000
Purchased a truck for $25,000
Sold land for $10,000
Borrowed $15,000
What was the total change in cash during the year?
$44,000
Walter E. Diemer, as a 23-year-old accountant, accidentally invented this item that is designed to be inflated out of the mouth.
Bubble Gum
(He was an accountant at a chewing gum company and was testing recipes for chewing gums that were less sticky and more-stretchy. This gum was named Double Bubble.
Indicate Investing, Financing or Operating AND write a + or - to show the flow of cash.
Received loan proceeds to purchase large asset next month.
Financing +
That portion of stockholders’ (owners’) equity resulting from profits earned and kept in the business.
Retained Earnings
The widely used principle of accounting for assets at their original price to the current owner.
Cost Principle (Historical Cost)
This statement explains changes in financial position that result from profit-generating transactions in terms of revenue and expense transactions.
Income statement (Statement of Earnings)
What are the "Big 4" accounting firms?
Deloitte, PricewaterhouseCoopers (PWC), Ernst & Young (EY), Klynveld Peat Marwick Goerdeler (KPMG)
Indicate Investing, Financing or Operating AND write a + or - to show the flow of cash.
Received payment from credit customers
Operating +
The costs of the goods and services used up in the process of obtaining revenue.
Expenses
The accounting principle of providing with financial statements any financial and other facts that are necessary for proper interpretation of those statements.
Disclosure
The Cash Flow statement classifies the various cash flows into three categories. List all 3 in order as they appear on the statement.
Operating activities
Investing activities
Financing activities
Luca Pacioli is famously quoted as saying....
a person should not go to sleep at night until the debits equal the credits.