Log in
HomeStudy Guides420,000CA160,000

AFM101 Final: AFM101 Notes

141 views17 pages
School
University of Waterloo
Department
Accounting & Financial Management
Course
AFM101
Professor
Sasan Saiy

For unlimited access to Study Guides, a Grade+ subscription is required.

qq919649100 and 40177 others unlocked
AFM101 Full Course Notes
30
AFM101 Full Course Notes
Verified Note
30 documents

Document Summary

The owner-manager: in charge of day of day to day operations. Investors: buy small portions of company through the purchase of shares. Nancing for those: assets: are economic resources controlled by the entity as a result of past business events, and from which future economic bene ts can be obtained. Assets are usually listed in order of liquidity on a statement of financial position: liabilities: are the entity"s obligations that result from past business events. Liabilities are usually listed in order of maturity: shareholders" equity: indicates the amount of nancing provided by owners of the business (contributed capital), as well as earnings over time (retained earnings) Earnings before tax, tax, net earnings: revenues: result of the sale of goods or services to customers. Revenues are reported when the goods/services are sold, whether or not they have been paid off: expenses: represent the monetary value of resources in the entity used up, or consumed, to earn revenues during the period.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers

Related Documents

AFM101 Lecture Notes - Lecture 1: International Financial Reporting Standards, International Accounting Standards Board, Retained Earnings
tealbear612
AFM101 Chapter Notes - Chapter 1: Financial Statement, Income Statement, Retained Earnings
ceruleanporcupine280
AFM101 Chapter Notes - Chapter 1: Six Swiss Exchange, Cash Cash, International Financial Reporting Standards
ivoryworm200

Related Questions

1. Creditors' claims on the assets of a company are called: (Points : 2)
 
Net losses
Expenses
Revenues
Equity
Liabilities
 
2. The primary objective of financial accounting is: (Points : 2)
 
To serve the decision-making needs of internal users
To provide financial statements to help external users analyze and interpret an organization's activities
To monitor and control company activitiesTo provide information on both the costs and benefits of managing products and services
To know what, when and how muchto produce
 
3. Assets created by selling goods and services on credit are: (Points : 2)
 
Accounts payable
Accounts receivable
Liabilities
Expenses
 
4. The debt ratio is used: (Points : 2)
 
To measure the amount of equity relative to the expenses
To reflect the risk associated with a company's debts
Only by banks when a business applies for a loan
To determine how much debt a firm should pay off
 
5. Net Income: (Points : 2)
 
Decreases equity
Represents the amount of assets owners put into a business
Equals assets minus liabilities
Is the excess of revenues over expenses
Represents the owners' claims against assets
 
6. Internal users of accounting information include: (Points : 2)
 
Shareholders
Customers
Creditors
Government regulators
Line Supervisor
 
7. Risk is: (Points : 2)
 
Net income divided by average total assets
The reward for investment
The uncertainty about the expected return that will be earned from an investment
Unrelated to expected return
 
8. An example of an operating activity is: (Points : 2)
 
Paying wages
Purchasing office equipment
Borrowing money from a bank
Selling stock
Paying off a loan
 
9. Which accounting assumption assumes that all accounting information is reported monthly or yearly? (Points : 2)
 
Business entity assumption
Monetary unit assumption
Value assumption
Cost assumption
Time period assumption
 
10. Distributions of assets by a business to its stockholders are called: (Points : 2)
 
Dividends
Expenses
Assets
Retained earnings
Net Income

Derivatives Statement No. 133 Accounting for Derivative Instruments and Hedging Activities establishes accounting and reporting standards for derivative instrument embedded in other contracts and for hedging activities. The statement requires that an entity recognize all derivatives as either assets or liabilities in the statements of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as: (a) A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment. (b) A hedge of the exposure to variable cash flows of a forecasted transactions or (c) A hedge of the foreign currency exposure a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security or a foreign currency denominated forecasted transactions. Requirements Review Statement No. 133 and evaluate the standard in terms of the conceptual framework. Define a derivative from an accounting perspective. Provide at least three characteristics of a derivative. Name and describe three derivatives. When was the implementation date of the statement? Briefly summarize the statement.

MULTIPLE CHOICE:

1. All of the following are reasons for international accountingdiversity:

A) the culture of a nation

B) differences in the purpose of the financial information

C) the nature of a country's financing system

D) the institutional structures of a country

E) taxes

2. The culture of a country determines the nature of a country'sfinancing system. What type of funding system leads to what kind ofaccounting?

A) A system of external financing of weak capital equity leadsto an accounting system for external shareholders.

B) An external financing system of weak capital equity leads toan accounting system for individual owners.

C) An external financing system of strong capital equity leadsto an accounting system for external shareholders.

D) An external financing system of strong capital equity leadsto a system of accounting for taxes.

E) A strong external equity equity financing system leads to anaccounting system for creditors.

3. By April 2001, what is the name of the organizationresponsible for setting international accounting standards?

A) International Accounting Standards Committee

B) International Organization of securities Commissions

C) International Accounting Standards Board

D) European Union

E) World Trade Organization

4. One of the FASB's convergence initiatives was intended toeliminate a variety of individual differences between IFRS and USGAAP. This resulted in changes in all of the following, exceptfor:

A) earnings per share.

B) inventory costs.

C) accounting changes.

D) research and development.

E) asset exchanges.

5. Diversity in accounting practices causes the following problems, except:A) difficulty in accessing foreign markets.B) a lower cost of capital.C) the lack of comparability of financial statements between companies from different countries.D) higher costs in the preparation of consolidated financial statements by companies with operations abroad.E) difficulty for investors to determine attractive acquisitions in foreign countries.