Chapter 1: Conceptual Framework of Financial Reporting

The owner is usually also the manager of the company.

________ is decreased or increased depending on the additional contributions or withdrawals of owners.

The _______________ and ________ includes the rules that regulate the corporation's management.

It is a financial statement that track changes in company equity and is prepared by a firm at the end of a reporting period along with other crucial financial records.

The claim of the business creditors extends to the owner's assets.

How is report form presented?

The ______ or ________ establish the corporation's policies.

How account form is presented?

As a sole proprietor, there is just ____ owner.

What are some examples of Intangible Assets?

It is acquired to improve a company's value and benefit its operations and are reported on the balance sheet.

Can a single shareholder own many stocks?

What are the presentation forms of Financial Position?

What are the common examples of current assets?

____________ can only make claims against the corporation's assets.

The Income statement, unlike the Statement of Financial Position or Statement of Changes in Owner's Equity, _____________.

The statement of financial position is formatted according to the basic accounting equation:

A typical financial statement will usually feature an overview of a company's ________, _________, and _________.

A ________ is a resource with economic value that an individual or corporation posseses or controls with the expectation that it will give them future gain.

A company is a legal entity distinct from its owners. The ____________ controls all corporations in the Philippines.

One of the qualities of a __________ is the separation of ownership and management.

The cost will not be separated into their many functions. By their very nature, presenting expenses eliminates any managerial judgement.

The most complex type of business organization is the ____________.

In the ___________ __________, expenses are broken down into areas including raw materials, transportation costs, staffing costs, depreciation, and employee benefits.

profit and loss less/plus the components of other comprehensive income

What are the classifications of Liabilities?

The Statement of Financial Position is also known as?

What are often shown on the equity statement?

The company has no legal identity other than its owner.

Also known as short-term liabilities, debts or obligations that must be paid within a year.

What is the formula of Net income?

The owner's assets and credit standing limit the ability to get financing for the business.

What are the FORMS OF PRESENTING the Income Statement?

In corporation, ownership is divided on _______ or ________.

What are the common examples of non-current liabilities?

_________ are not often involved in the corporation's day-to-day activities.

In __________ __________, cost of goods sold, selling expenses, administrative expenses, other expenses/losses and the like are disclosed according to their functions.

The legal identity of a partnership is distinct from that of its owner (as stated in ___________________)

These are the short-term assets that can be quickly liquidated and used to meet a company's immediate needs, run its daily operations, and pay current expenses.

it is basically one column that is presented in a vertical orientation or downward sequence

Income statement also concentrates on four main elements: _____, ______, _____, and _____.

In corporations, ____________ invest their funds, and __________ runs the business.

Other than Net income or Net loss, what else can result into a change in equity of an entity? Aside from net profit or Loss, the statement of changes in equity has the following elements:

A financial obligation incured by a business in order to finance the company's ongoing operations.

Comprehensive Income includes?

What are some examples of equity?

It refers to the remaining value of an owner's interest in the entity after deducting all of the entity's liabilities.

___________ claims may extend to the partners's personal assets.

Income statement summarizes an entity's ______ and _______ for a specified period of time.

_______ are the resources that a company needs in order to operate and continue to expand their business for them to generate positive economic value.

The change in a company's assets from non-owner sources throughout the period is called ______________.

They usually have a high monetary worth, provide long-term benefits to the company and cannot be converted into cash immediately.

taxes computed based on tax laws.

Liabilities are fulfiled throughout a period by exchanging economic benefits such as _________, _________, __________.

What are the Income Statement LINE ITEMS?

______ serve as the channel via which users are periodically informed of the data gathered and processed in Financial accounting.

showing the profit and loss

How do we present Comprehensive Income?

Profits are split among the partners.

They are expected to be converted to cash or spent within a year or operational cycle.

Income Statement may also known be known as a __________ or ___________.

It consist of all the costs associated with producing the goods or providing the services offered by the company.

It is presented horizontally, with information in two columns next to one other.

Because of the short-term nature of these financial obligations, the management must carefully monitor it to ensure that the company has enough ______ from current assets to cover debts or obligations

It shows both the components of the Profit and Loss and the components of the Other Comprehensive Income in a _____________.

Partners can be typically involved in business management.

What LINE ITEMS are presented in the Statement of Financial Position?

Also known as long-term liabilities

It is included alongside the equity on the right side of the balance sheet.

Are obligations that are due for more than one year.

A ________ is owned by a larger number of investors or shareholders.

Two classifications of Assets

It refers to assets that company keeps for more than a year or has a useful life longer than 12 months and can be used to generate long-term revenue.

Non-current Liabilities are important components of a company's long-term financing and are crucial in measuring a company's ___________.

It is the cost from borrowing funds.

It also reveals if the entity is profitable or not over time.

The most basic type of business organization.

The _________ of an entity's financial statement will include the Comprehensive Income.

This method allows the entity to calculate gross profit and operating profit within the income statement.

It is used to present a snapshot of the financial position of a company at a given point of time and is widely used to examine a company's financial stability as well as its risk.

Expenses that are not traceable to a certain function are separated and distributed depending on management's judgement in function presentation.

It is a formal financial statement that summarizes an entity's revenue and expenses for a specified time period.

Current Assets are used to ________, _________, and ____________.

__________ have limited responsibility.

It is the money a company spends during the period.

It is the money an entity takes during the period.

A _________ is a business held by two or more people known as partners who pooled their resources to attain a shared goal of operating a business and sharing earnings.

In account form, the assets are listed in the ______ column of the balance sheet, while the liabilities and equity are listed in ______ column.

What are the common examples of current liabilities?

The ___________ reports the cash receipts or an inflow of cash and cash payments or an outflow of cash that occurred in a certain accounting period.

It provides necessary and relevant information about the changes in the cash and cash equivalent, which helps for good decision-making.

______ is composed of cash on hand, cash in bank, checks, and unrestricted demand deposits and savings.

______ refers to the investments that are short term in nature and easily convertible into an amount of cash and also not subject to an insignificant risk of change in value.

the maturity period of cash equivalent must be ____________ from the date of its acquisition.