CFI 100 FMVA Study Guide Exam Certification Questions and Answers

CFI 100 FMVA Study Guide Exam Certification Questions and Answers Income statement accounting - CORRECT ANSWER-Accrual - revenues & costs recorded as a business earns or incurs them, not as it receives and pays money It includes them in the relevant period's income statement and matches them as closely as possible CF makes no difference whatsoever - IS where sale happens = How do you decide when sale happens? RECOGNIZE REV UPON DELIVERY OF GOOD/SERVICE PERFORMED Why are profits and cash flow not the same thing? - CORRECT ANSWER-Accounting differences The idea of matching over time - CORRECT ANSWERCFS Accounting - CORRECT ANSWER-Only records transactions when cash is received VS IS records ALL revenues earned, whether in cash or accrued Cash accounting method - CORRECT ANSWER-record income and expenditures at the time the money changes hands Cash accounting method - CORRECT ANSWER-An accounting method in which income and expenditures are recorded at the time the money changes hands. Accrual Accounting - CORRECT ANSWER-recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not. Accrual Basis Accounting - CORRECT ANSWER-reporting income when it is earned and expenses when they are incurred Accrual Basis Accounting - CORRECT ANSWER-the method of accounting that recognizes revenue when it is earned and matches expenses to the revenues they helped produce Accrual Basis Accounting - CORRECT ANSWER-Accounting basis in which companies record, in the periods in which the events occur, transactions that change a company's financial statements, even if cash was not exchanged.