cma course p1 : unit1

cma course part 1 :  lectures and some questions about each unit

MR:amr taison
MR:mohamed cma
MR:desoky kh.
(1.1) Concepts of Financial Accounting

1) Objective of General-Purpose Financial Reporting
2) Users of Financial Statements
3) Features of Financial Statements
4) Financial Statement Relationships
5) Accrual Basis of Accounting
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(1.2) Statement of Financial Position (Balance Sheet)

1) Overview
2) Elements of the Balance Sheet
3) Current and Non-current Assets
4) Current and Non-current Liabilities
5) Equity
6) Balance Sheet Elements Are Permanent Accounts
7) Major Balance Sheet Note Disclosures
8) Limitations of the Balance Sheet
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(1.3) Income Statement and Statement of Comprehensive Income

1) Income Statement Elements
2) Gross profit
3) Typical Items of Cost and Expense
4) Income Statement Formats
5) Reporting Irregular Items
6) Major Income Statement Note Disclosures
7) Limitations of the Income Statement
8) Statement of Comprehensive Income
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(1.4) Statement of Changes in Equity and Equity Transactions
1) Statement of Changes in Equity
2) Statement of Retained Earnings
3) Common and Preferred Stock
4) Equity Transactions – Issuance of Stock
5) Equity Transactions – Treasury Stock
6) Equity Transactions – Cash Dividend
7) Equity Transactions – Property Dividend
8) Equity Transactions – Stock Dividend and Stock Split
9) Major Statement of Changes in Equity Note Disclosures
10) Limitations of the Statement of Changes in Equity
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(1.5) Statement of Cash Flows

1) Overview
2) Operating Activities
3) Investing Activities
4) Financing Activities
5) Major Statement of Cash Flows Note Disclosures
6) Indirect Method of Presenting Operating Cash Flows
7) Direct Method of Presenting Operating Cash Flows
8) Limitations of the Statement of Cash Flows
G.2020G.2021mr.amro taison
1.11.1lec. 2
1.21.2lec. 2
1.31.3lec. 2
1.41.4lec. 3
1.51.5lec. 4
Some Questions about unit 1
1- As a primary purpose, financial statements are prepared for...
Providing useful information to investors and suppliers to make their decisions regarding the company
2- Users of financial statements are categorized as...
* Direct users such as: investors, suppliers and management
* Indirect users such as: advisors, financial analysts and stock exchanges
3- What are the financial statements issued by the company to its users?
1) statement of financial position (balance sheet)
2) Income statement
3) statement of comprehensive income
4) cash flow statement
5) statement of changes in equity
4- What is the difference between accrual basis and cash basis?
* Acceding to accrual Basis: Financial transactions are recorded when they occur, regardless of whether collection or payment has occurred or not
* Acceding to cash basis: Revenues are recognized when they are received from others, and expenses are recognized as soon as they are paid to others, whether those revenues or expenses relate to the current period or not.
5- What does the statement of financial position contain?
Assets, Liabilities and Equity
6- What is the difference between assets, liabilities and equity?
1) Assets are the Properties that the company uses in order to achieve future benefits
2) Liabilities are the debts that arose from the company's previous transactions with other, which the company will settle those obligations in the current or future period.
3) Equity: It is the portion left after subtracting the liabilities from the assets
7- What is the difference between current and non-current assets?
1) Current assets: include all assets that can be liquidated into cash within one year or the company’s normal operating cycle, and include cash , bank balances, inventory, prepaid expenses, and investments such as stocks and bonds.
2) Non-current assets: include all assets that the company uses and benefits from it for more than one fiscal year, and these assets are not for sale, such as lands, buildings, cars, and equipment
8- What is the difference between current and non-current liabilities?
1) Current Liabilities: These are obligations payable during a specific period of time estimated at less than one fiscal year, or during the company's normal operating cycle, such as accrued expenses and dividends payable.
2) Non-current liabilities: These are obligations that are payable over a period of more than one year. Including bank loans and bonds
9- What is the equation used to determine net income?
Total Revenues - Total Expenses = Net Income
10- What is the effect of profit and loss on equity?
Profits lead to an increase in equity, while losses lead to a decrease in equity, except for the transactions of owners
11- The matching principle states that....
The period in which the revenue is realized and recognized, must also include the expenses that contributed to the realization of this revenue
12- What is the concept of comprehensive income?
Comprehensive income includes all operations and events that led to a change in net assets (or equity) during the accounting cycle, after excluding changes in equity resulting from capital operations such as increasing or decreasing capital and distributing profits, i.e.
13- What is statement of changes in equity?
It summarizes the changes in equity for a specific accounting period, it increases with owners' investments and revenues, and decreases with personal withdrawals and a decrease in capital
14- When the company changes from one accounting principle to another, or corrects an error, how is it reported?
These changes are applied retrospectively and therefore there is no effet on the income of the current period
15- When a company issues common stocks, how is the entry recorded?
Cash : XX
------ Common stock : XX
------ Additional paid-in capital : XX
16- One of the limitations of the property rights list is that...
The retained earnings statement does not reflect the company’s financial ability to pay its debts or pay dividends, and this is because of the accrual basis.
17- The main objective of preparing the statement of cash flows is ….
To provide users of the accounting data with information about the cash received and the cash paid during the financial period, and thus it is possible to rely on such information to determine the company’s ability to obtain the necessary financing of cash or what it needs
18- How is the statement of cash flows from operating activities prepared?
The company can use two methods of preparation, the direct method and the indirect method
19- What are the sections of the cash flow statement?
1) Cash flows from operating activities
2) Cash flows from investing activities
3) Cash flows from financing activities
20- Profits from the sale of fixed assets, how is it processed in the statement of cash flows
Profits from the sale of fixed assets are not considered an operating activity, and these profits lead to an increase in net income, so the profits from the sale of assets are subtracted in the cash flow section of operating activities
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