Balance Sheet

Question 0

Balance Statements are also referred to as?

Answer 0

Statement of Financial Position

Question 1

What are the 4 Major Statements?

Answer 1

Balance Sheet
Income Statement
Cashflow Statements
Shareholder’s Equity

Question 2

What is the definition of liabilities?

Answer 2

The amount of money a company owes to others.

Question 3

What is the definition of Assets?

Answer 3

Things a company own that have value.

Question 4

What does a company do with Dividends?

Answer 4

Sometimes companies distribute earnings, instead of retaining them. Note: Dividends are not an expense.

Question 5

What does the Balance Sheet show?

Answer 5

A snapshot of a company’s financial condition at a specific moment in time.

• The value of what the business owns.
• The amount of debt the business owes.
• How much inventory is on hand.
• How much money the business has to work within the short term.
• The BS helps you quickly understand the financial strength and capabilities of a business.

Question 6

How are Assets listed on the Balance Sheet?

Answer 6

They are generally listed based on how quickly they will be converted into cash.

Question 7

Balance Sheets: What are Current Assets?

Answer 7

Things a company expects to convert to cash within one year.

Question 8

Balance Sheets: What is one example of Current Assets? and why?

Answer 8

Inventory - Most companies expect to sell their inventory for cash within one year.

Question 9

Balance Sheet: What is the definition of Noncurrent Assets?

Answer 9

Are things a company does not expect to convert into cash within one year or that would take longer than one year to sell.

Question 10

Balance Sheet: Noncurrent Assets includes Fixed Assets. What is the definition of fixed assets?

Answer 10

Those assets used to operate the business but that are not valuable for sale.

Question 11

Balance Sheet: How are Liabilities usually listed? Liabilities are said to be…?

Answer 11

They are generally listed based on there due date.

Note: They are said to be either current or long-term.

Question 12

Balance Sheet: What is the definition of Current Liabilities?

Answer 12

Are obligations a company expects to payoff within the year.

Question 13

Balance Sheet: What are Long-Term Liabilities? Example.

Answer 13

Obligations that are due more than one year away. 10 year Loan.

Question 14

What assets are found on the BS that make up Current Assets?

Answer 14

Cash
Accounts Receivable
Inventory
Merchandise

Question 15

Balance Sheet: What are some fixed assets that cannot be converted into cash that easily?

Answer 15

Land, Computer Equipment, Vehicles, Furniture, Buildings

Question 16

Balance Sheet: Long-term Investments and Other Assets: What are some Intangible Assets?

Answer 16

Goodwill, Patents or Copyrights, Stocks & Bonds that companies plan to keep more than a year.

Question 17

Balance Sheets: What are those liabilities found under Current Liabilities?

Answer 17

Accounts Payables, Accrued Expenses, Current Debt & Taxes owed to the gov.

Question 18

Balance Sheet: What is the meaning of Shareholder’s Equity “Capital/Net Worth?

Answer 18

The amount of money owners invested in the company’s stock (plus or minus) the company’s earnings or losses since inception.

Question 19

Balance Sheet: Shareholder’s Equity Formula?

Answer 19

Shareholder’s Equity = Assets - Liabilities