PA 650 (WANG Chp 9) Statement of Net Assets and the Statement of Net Position

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PA 650 (WANG Chp 9) Statement of Net Assets and the Statement of Net Position
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2015-11-15 17:11:03
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  1. Net Worth
    What a government has after taking out what is owed. Often called net assets.
  2. Balance Sheet
    Financial statement prepared to disclose assets and liabilities.
  3. Statement of Net Assets
    Name pre 2012. Also known as the Statement of Net Position, post 2012. The balance sheet is reported in this statement.
  4. Statement of Net Position
    Name post 2012. Also known as the Statement of Net Assets, pre 2012. The balance sheet is reported in this statement.
  5. Statement of Activities
    The financial statements used to report annual revenues and expenses for a government as a whole.
  6. Fundamental Accounting Equation
    Assets-Liabilities=Net Assets This is always true for all types of financial transactions.
  7. Assets
    What you own
  8. Liabilities
    What you owe
  9. Net Assets
    What is left of assets after liabilities are covered. Assets-Liabilities=Net Assets. Also known as Net Position.
  10. Net Position
    What is left of assets after liabilities are covered. Assets-Liabilities=Net Assets. Also known as Net Assets.
  11. Current Assets
    Cash, cash equivalents, or resources that can be converted to cash within a year or that will be consumed within a year.
  12. Non Current Assets
    Long-term assets or fixed assets such as land, buildings, infrastructures, equipment, and long-term investments over a year.May also include assets designated for specific purposes so they are not available for immediate and general use.
  13. Cash or Cash Equivalents
    Common asset account: May include bank savings and checking accounts, short term certificates of deposit, and other assets that can be converted to cash quickly and easily.
  14. Investments
    Common asset account: Marketable securities such as stocks and bonds, real estate, and other investment vehicles.
  15. Accounts Receivable
    Common asset account: When an organization has provided a product or a service to a citizen or a customer and has not received the payment, the amount is reported as receivable, suggesting the payment will be collected in the future. Ex: property taxes receivable and interest and penalty receivable.
  16. Inventory
    Common asset account: This category is for the materials and supplies that will be used in producing goods and services.
  17. Restricted cash and cash equivalents
    Common asset account: These must be reported as noncurrent assets. They are monies designated for specific purposes and are therefore not available for immediate and general use by the government. Restricted cash can be used for a range of purposes such as loan repayment, equipment purchase, or investment.
  18. Long Term Assets or Fixed Assets
    Also Capital Assets. These noncurrent assets are often in the form of land, buildings, infrastructure, and equipment. Long-term assets or fixed assets cannot be easily converted to cash.
  19. Current Liabilities
    Liabilities that will be paid within a short time, often within a year.
  20. Noncurrent Liabilities
    Liabilities due beyond a year (or fiscal and operational cycle)
  21. Accounts Payable
    Liability account: these accounts show the amount an organization owes others. Ex: wage payable, interest payable, or claims payable.
  22. Long Term Debt
    Liability account: An organizations long-term loans or leases. Long-term obligations can be reported as current liability (due within one year) or noncurrent liability (due in more than one year).
  23. Deferred Outflows of Resources
    Consumption of net assets that is applicable to a future reporting period instead of the current period.
  24. Deferred Inflows of Resources
    An acquisition of net assets that is applicable to a future reporting period instead of the current period.
  25. Restricted Net Assets (Position)
    Net assets whose use has been restricted for specified purposes or for the time of use. Ex restricted for paying debts.
  26. Unrestricted Net Assets (Position)
    Net assets whose use is not restricted
  27. Net Investment in Capital Assets
    The net value of a capital item after deducting the loan amount.
  28. Accounting Cycle
    The raw financial information is obtained and processed to be reported in the final statements. Evidence of Transactions -> The Accounting Journal -> The Accounting Ledger -> Financial Statements and Reports
  29. Accounting Journal
    A chronological listing of every financial event (transaction) that has occurred in an organization.
  30. Accounting Ledger
    Summarized financial transaction information by account.
  31. Double-Entry Accounting
    Every accounting transaction must be entered in at least two accounts.
  32. Debit or Credit
    Asset accounts are increased by debits and decreased by credits; liability and net asset accounts are increased by credits and decreased by debits.
  33. Primary Government
    State or local government that has a separate elected governing body and is fiscally independent of other state or local governments.
  34. Component Units
    Entities that are legally separate from the primary government but have close financial or governing relationships with the primary government. Ex: public universities, housing authorities, and retirement systems.
  35. Monetary Denominator
    All actions that have a financial element must be monetized. Land and inventories need to be converted to monetary terms.
  36. Objective Evidence
    There is a preference to use objective evidence rather than subjective estimation in financial reporting.
  37. Cost Convention
    The practice that assets should be valued at their cost at the time of acquisition unless another rule governs the valuation of assets.
  38. Conservatism
    The need to consider risk in collecting revenues and the fact that less than 100% of them can be collected.
  39. Going concern
    The assumption that the reporting entity is going to continue in business for the foreseeable future.
  40. Materiality
    Requires that an auditor report significant (material) reporting error.
  41. Accrual basis accounting
    Organizations recognize that all financial transactions as they report their financial positions and operations.

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