Shared Flashcard Set

Details

Relationship Between Financial Statements
N/A
5
Finance
Undergraduate 4
04/09/2015

Additional Finance Flashcards

 


 

Cards

Term
System of Financial Statements
Definition

- Balance sheets: Beggining and Ending

- Income Statement

- Statement of Cash Flows

- Statement of Owners Equity

Term
Why Prepace Financial Statements
Definition

- Communication

- Measure performance

- Control of expenditures and investments

- establishing and evaluating goals

- planning and budgeting

- assessment of risk

- a basis to calculate production costs

Term
Advantages for Farmers and Ranchers
Definition

- understand the business from a financial viewpoint

- helps generate information for efficient use in making financial decisions, when used with IRS tak returns

- AFRA can be prepared from existing accounting systems being used for income tax records

- permits in depth financial analysis of liquidity, solvency, profitability, repayment capacity and financial efficiency

Term
Advantages for Lenders
Definition

- Customers provide complete statements

- gives complete information on which to base lending decisions

- provdies information to assess trendsin financial performance

- saves time in working loan application

- provides better documentation for the loan to provide to management and regulators

Term

Assumptions and Philosophy

 

Definition

- based on farm financial standards task force recommendations

- cash-basis calendar taz year is assumed

- balance sheet is completed as of 12/31 and based on cost and market valuation of assets

- only simple cash records systems are required to provide sufficient data

- personal and business can be consolidated into a single sheet or treated separately

- cash basis income reported is converted to an accrual basis net income

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