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job preparation (Subject) / accounting (Lesson)

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• What is an annual report? comprehensive report on a company's activities throughout the preceding year give shareholders and other interested people information about the company's activities and financial performance. Most jurisdictions require companies to prepare and disclose annual reports Companies listed on a stock exchange are also required to report at more frequent intervals 
• What are accruals? Adjustments for 1) revenues that have been earned but are not yet recorded in the accounts, and 2) expenses that have been incurred but are not yet recorded in the accounts. The accruals need to be added via adjusting entries so that the financial statements report these amounts. Ausgabe jetzt, Aufwand später = Aktiver Rechnungsabgrenzungsposten Jahresabschluss ARA (= oder auch Transitorische Aktive) an Mietaufwand (=Raumaufwand)) Januar umgedreht
• Walk me through the 3 financial statements Income Statement, Balance Sheet and Cash Flow Statement. The Income Statement gives the company’s revenue and expenses, and goes down to Net Income, the final line on the statement. The Balance Sheet shows the company’s Assets – its resources – such as Cash, Inventory and PP&E, as well as its Liabilities – such as Debt and Accounts Payable – and Shareholders’ Equity. Assets must equal Liabilities plus Shareholders’ Equity. The Cash Flow Statement begins with Net Income, adjusts for non-cash expenses and working capital changes, and then lists cash flow from investing and financing activities; at the end, you see the company’s net change in cash.”
• How do the 3 statements link together? Net Income from the Income Statement flows into Shareholders’ Equity on the Balance Sheet, and into the top line of the Cash Flow Statement Changes to Balance Sheet items appear as working capital changes on the Cash Flow Statement, and investing and financing activities affect Balance Sheet items such as PP&E, Debt and Shareholders’ Equity. The Cash and Shareholders’ Equity items on the Balance Sheet act as “plugs,” with Cash flowing in from the final line on the Cash Flow Statement.”
• If I were stranded on a desert island, only had 1 statement and I wanted to review the overall health of a company – which statement would I use and why? Cash Flow Statement because it gives a true picture of how muchcash the company is actually generating, independent of all the non-cash expenses youmight have. 
• 2 best ones Income Statement and Balance Sheet, because you can create theCash Flow Statement from both of those 
• Depreciation Abwertung
• When would a company collect cash from a customer and not record it as revenue? subscription
• What’s the difference between cash-based and accrual accounting? Cash-based accounting recognizes revenue and expenses when cash is actually receivedor paid out; accrual accounting recognizes revenue when collection is reasonably certain(i.e. after a customer has ordered the product) and recognizes expenses when they areincurred rather than when they are paid out in cash. Most large companies use accrual accounting because paying with credit cards and linesof credit is so prevalent these days; very small businesses may use cash-basedaccounting to simplify their financial statements.
• how Depreciation going up by $10 would affect the statements. Income Statement: Operating Income would decline by $10 and assuming a 40% tax rate,Net Income would go down by $6. Cash Flow Statement: The Net Income at the top goes down by $6, but the $10Depreciation is a non-cash expense that gets added back, so overall Cash Flow fromOperations goes up by $4. There are no changes elsewhere, so the overall Net Change inCash goes up by $4. Balance Sheet: Plants, Property & Equipment goes down by $10 on the Assets sidebecause of the Depreciation, and Cash is up by $4 from the changes on the Cash FlowStatement. Overall, Assets is down by $6. Since Net Income fell by $6 as well, Shareholders’ Equityon the Liabilities & Shareholders’ Equity side is down by $6 and both sides of theBalance Sheet balance.

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