Flashcard Set Preview
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| 1 |
Explain the purpose of Financial Statements
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the purpose of financial statements is to communicate information about an organization's financial...
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What are the concepts and principles that encompass the Generally Accepted Accounting Principles...
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1. General Accounting Concepts
2. Concepts and Principles affecting the recording of transactions
3....
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| 3 |
Brieftly describe the two general accounting concepts assumptions made when analyzing financial...
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1. Business Entitiy Concept: Assumes that each organization, or business entity, has an existance...
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Explain the importance of concepts and principles that help users of financial statements in...
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Money Market Concept: organization must report economic activities in money terms
Cost Principle:...
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Explain the importance of concepts and principles that help an organization prepare a conservative...
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Accounting Period Concept: requires financial statements to be prepared over relatively short...
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| 6 |
Describe the content and purpose of the Balance Sheet.
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provides a snapshot of a company's financial position as of a specific date and records assets,...
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| 7 |
Describe the content and purpose of The Income Statement.
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reports an organization's profit or loss for a stated period and helps identify types of operations...
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| 8 |
Describe the content and purpose of The Statement of Changes in Owners' Equity.
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explains any changes that have occurred in the organization's capital accounts during a specific...
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| 9 |
Describe the content and purpose of The Statement of Cash Flows.
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summarizes the cahs effects of an organization's operating, investing, and financing activities...
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| 10 |
Why is it important to analyze the entire set of financial statements together?
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when taken together the statemetns provide the suer with a snapshot of the financial condition...
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| 11 |
Briefly describe the three sections of the statement of cash flows
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1. Operating Activities: reflects operating cash inflows and outflows, non-cash income and...
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| 12 |
Describe the limitations of financial statements
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the accuracy is limited because many estimates, assumptions, and compromises are required for...
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| 13 |
Explain how insurance professional use financial statements.
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Company Management: making informed decisions, monitoring results, forfilling goals to oblgiation...
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