Financial statement analysis concepts tested on the CFA Level 1 financial reporting and analysis topic area.
About this set
45 basic cards for CFA Level 1 Finance. It opens with "What accounting basis records transactions when they occur rather than when" and "Under accrual accounting, when is revenue recognized?". More Professional Certifications decks are listed below.
45 cards · basic cards · AI-written, checked twice. Edit anything.
- What accounting basis records transactions when they occur rather than when cash changes hands?
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Accrual basis accounting.- Under accrual accounting, when is revenue recognized?
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When it is earned, regardless of when cash is received.- What principle requires expenses to be recognized in the same period as the revenues they helped generate?
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The matching principle.- Which financial statement reports a company's revenues and expenses over a period of time?
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The income statement.- Which financial statement reports a company's assets, liabilities, and equity at a single point in time?
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The balance sheet.- Which financial statement classifies cash flows as operating, investing, and financing?
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The statement of cash flows.- Which financial statement reconciles the beginning and ending balance of each equity component?
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The statement of changes in equity.- The basic accounting equation is Assets = ____.
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Liabilities + Equity- On a classified balance sheet, assets expected to be converted to cash within one year (or the operating cycle) are classified as what?
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Current assets.- What is the formula for gross profit?
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Revenue minus cost of goods sold.- What does EBIT stand for?
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Earnings before interest and taxes.- What does EBITDA add back to EBIT?
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Depreciation and amortization.- What is comprehensive income?
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Net income plus other comprehensive income (OCI).- Give one example of an item reported in other comprehensive income (OCI).
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Unrealized gains or losses on available-for-sale securities.- What is the formula for basic earnings per share (EPS)?
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(Net income minus preferred dividends) divided by weighted average common shares outstanding.
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