Course 4 Week 2 Flashcards
True or False: Horizontal analysis results can be listed as either percentages or dollar amounts.
True
The following are aspects of the Income Statement except:
Name 3 things
Net Profit, Taxes, Gross Revenue, Sales
True or False: In vertical analysis, the gross sales or revenue is the base amount on a P&L statement.
True
If Amy’s Aroma’s operating expenses in 2020 were $45,000, and in 2019 they were $37,000, what would the percent change be?
21 %
True or False: In vertical analysis, you compare each line item in the financial statement to the base amount as a percentage of that base amount.
True
Deferred Revenues is an account that is found in:
Current Liabilities
Short-term Investments is an account that is found in:
Current Assets
Long-term debt securities issued by the company are called:
Bonds Payable
Which section of the Statement of Cash Flows would you look to find cash flows related to inventory?
Operating Activities
Which section of the Statement of Cash Flows would you look to find cash flows related to notes payable?
Financing Activities
Which would be considered deferred revenue?
Cash Inflow
A line item on the Statement of Cash Flows shows a loan amount of -$2,000. What does this mean?
The company is paying off a loan for the amount of $2,000.
Which section of the Statement of Cash Flow would you look to find cash flows related to inventory?
Operating Activities
The Net Income on the Cash Flow Statement should match the bottom line on the _________, and the Cash at end of the period should match Cash on the _________.
Income Statement, Balance Sheet
True or False: Horizontal Analysis Results can be listed as percentages and dollar amounts as long as one or the other is consistently used.
True
Where would you locate Deferred Revenues on the Balance Sheet?
Current Liabilities
True or False: In vertical analysis, the Gross Sales or Revenue is the base amount on a P&L statement.
true
True or False: Deferred Revenue is considered a Cash Inflow.
true
True or False: On the Statement of Cash Flows, the cash at the end of the period is calculated by adding the net cash increase for that period to the cash at the beginning of the period.
true
Which of the following is the bottom line on the P&L statement?
NEt profit
True or False: On the Statement of Cash Flows, the Cash at the beginning of the period matches the Net Profit on the P&L for that same period.
false
Sales Tax and Payroll Tax are both considered _______________ and found on the ______________.
Liabilities, Balance Sheet
Land improvements would be found on which of the following documents?
Balance Sheet
Explain Vertical Analysis in reference to Income Statement and Balance sheet
Vertical analysis is a method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement. Thus, line items on an income statement can be stated as a percentage of gross sales, while line items on a balance sheet can be stated as a percentage of total assets or liabilities, and vertical analysis of a cash flow statement shows each cash inflow or outflow as a percentage of the total cash inflows.
Explain Horizontal Analysis
Compares numbers line by line with multiple timeframes being the column head and each line the rows
Short term investments
investments going to be cashed within a year
Goodwill
intangible asset when a company buys another company for more than fair price
