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Temporary Investements r:
- securities held by a firm which are
- 1. readily marketable
- 2. intended to be converted to cash w/n the next year or operationg cycle of the business.
Will temporary Investments always be classified as LONG TERM INVESTMENTS?
No, only if it meets both criterias
what is marketable DEBT securities?
- security which represents a debt owed by one party to another party
- EXAMPLE: goverment and corporate bonds.
what is marketable EQUITY securities?
- security which represents an ownership interest in coroporation
- EXAMPLE: common stock
companies related to each other in same way are
a company that owns more than 50% of another company
a company that owns more than 50% owned by another company is
when transitions between affilates r eliminalted in the consolidation process
it is an intercompany elimination
when one company sells product to another company with in the same family
the result of a parent company financial statements are combined with financial states of subsidiary
consolidated financial statements
this exist when 1 company ownes more than 50% of another company and individuals can also do this
definition, value, unrealized gains & losses and realized gains & losses of TRADING SECURITIES
- definition: stocks and bonds bought and held primariy for sale n the near future to generate income on short term price difference.
- reported at fair value
- unrealized on the income statement
- realized on the income statement
definition, value, unrealized gains & losses and realized gains & losses of AVAILABLE FOR SALE SECURITIES
- definition: stocks and bonds which may be sold in the future but may also be held for an extended period of time.
- FAIR VALUE
- unrealized gains or losses reported as a seperate coponent of stockholders equity
definition, value, unrealized gains & losses and realized gains & losses of HELD TO MATURITY SECURITIES
- definition: debt securities (bonds) which the investor has both the intent and ability to hold until maturity.
- reported on the balance sheet of historical cost with NO recongition of unrealized being ok.
explain operating activites
- * income statement item
- * net income or net lost
- * adjustment for gain(-) or lost (+)
- * " " non cash (depreciation)
- changes in current liabilities (acct paya./tax paya/acc. liabilities)
- " " in current assets (acc. rec. / investments/ reduces net income)
what are examples of operating activities
- collected $ of acc. recievables
- paid $ of acc. payable
- loss on sale of land
- paying a note of recievables
- receipt on interest
- amortization of patent
what is investing activities
- changes in investments & long term assets
- pp & e (property, plant, & equipment)
what are examples of investing activities
- sold long term investment
- sale of building at book value
- purchase of land
what is financing activities
- changes in long term liabilities & stock holders quity
- cahnges in non current liabilities
- changes in stockholders equity items
give examples of financing activities
- issued $ par value c/s for cash
- declared and paid cash dividends
- issuance of capital stock
- retirement of bonds
what are the 3 essentials for statment of cash flow
- 1. comparative balance sheets
- 2. income statement of equivalent information
- 3. additional information not on financial statement
when ASSETS & STOCKHOLDERS EQUITY goes up what else goes up?
when ASSETS & STOCKHOLDERS EQUITY GOES DOWN what else GOES DOWN
LIABILITIES GOES UP
CASH GOES DOWN
LIABILITIES GOES DOWN
CASH GOES UP
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