Ferg-Supp Fin Info, Disclosures & GAAP

Why are footnotes necessary?

• Users of financial statements need more info.

• Owners need to be able to remember what happened.

• The Government can track spending.

Retained Earnings as previously reported MINUS Effect of correction of depreciation error EQUALS:

• Corrected beginning retained earnings

• Net Income

• Year end Retained Earnings

Which @ are added or subtracted from Corrected Beginning Retained Earnings to calculate the End of Year Retained Earnings?

• Net Income

• Dividends

• Assets

• Depreciation

Cost of Goods Sold is calculated based on changes to:

• Inventory

• Assets

• Liabilities

• Receivables

How many conditions must exist for a Contingent Liability to be triggered?

• 2

• 3

• 4

A Contingent Liability must have which TWO?

• Degree of Probability

• Reasonable Estimate

• Ongoing Liabilities

• Extraordinary Items

Which means "A high chance of something happening in the future"?

• Degree of Probability

• Reasonable Estimate

• Contingent Liability

• Extraordinary Item

A good guess as to the future impact to the company is called:

• Reasonable Estimate

• Degree of Probability

• Extraordinary Item

• Contingent Liability

What do Contingent Liabilities arise from? MARK ALL

• Lawsuits

• Perceived loss in the future

• A Win-fall

Gains or Losses that are considered both unusual in nature and infrequent in occurrence are:

• Extraordinary items

• Contingent liabilities

• Reasonable estimates