BCOR 3010 Accounting exam 2023 with complete solutions

Accounting The process of identifying, measuring, recording, and communicating financial information Balance Sheet financial statement describes a company's financial position at a particular point in time Income statement financial statement that reports the profitability of a business over a specific period of time Operating Income related to primary business activities revenues, CoGS, SG&A expenses, depreciation expenses, ect. Financial Reporting Is the communication of financial accounting information to external stakeholders Examples of Financial reporting Annual and quarterly reports (Financial Statements), and Other filings with the SEC How financial reporting facilitates capital allocation If a company's financial performance is measured accurately, fairly, and on a timely basis, the right managers and companies are able to attract investment capital. To provide unreliable and irrelevant information leads to poor capital allocation which adversely affects the securities market. financial accounting standards Are the rules companies follow when preparing financial statements Importance of financial accounting standards They require minimum disclosures, and create consistency across companies Accounting standard setters FASB for U.S. companies, IASB for international companies Accrual Basis Accounting Accounting method that records revenues when earned and expenses are matched to the periods in which they produce revenue Five major branches financial, managerial, tax, audit, accounting information systems importance of financial accounting standards FASB for U.S. companies, IASB for international companies Statement of cash flows measure over the reporting period, shows ability to generate cash and meet financial obligations, ect. What is the difference between revenues and gains revenues relate to primary business activities