Course 4 Week 2

Question 1

True or False: Horizontal analysis results can be listed as either percentages or dollar amounts.

Answer 1

True

Question 2

The following are aspects of the Income Statement except:

Name 3 things

Answer 2

Net Profit, Taxes, Gross Revenue, Sales

Question 3

True or False: In vertical analysis, the gross sales or revenue is the base amount on a P&L statement.

Answer 3

True

Question 4

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?

Answer 4

21 %

Question 5

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.

Answer 5

True

Question 6

Deferred Revenues is an account that is found in:

Answer 6

Current Liabilities

Question 7

Short-term Investments is an account that is found in:

Answer 7

Current Assets

Question 8

Long-term debt securities issued by the company are called:

Answer 8

Bonds Payable

Question 9

Which section of the Statement of Cash Flows would you look to find cash flows related to inventory?

Answer 9

Operating Activities

Question 10

Which section of the Statement of Cash Flows would you look to find cash flows related to notes payable?

Answer 10

Financing Activities

Question 11

Which would be considered deferred revenue?

Answer 11

Cash Inflow

Question 12

A line item on the Statement of Cash Flows shows a loan amount of -$2,000. What does this mean?

Answer 12

The company is paying off a loan for the amount of $2,000.

Question 13

Which section of the Statement of Cash Flow would you look to find cash flows related to inventory?

Answer 13

Operating Activities

Question 14

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 _________.

Answer 14

Income Statement, Balance Sheet

Question 15

True or False: Horizontal Analysis Results can be listed as percentages and dollar amounts as long as one or the other is consistently used.

Answer 15

True

Question 16

Where would you locate Deferred Revenues on the Balance Sheet?

Answer 16

Current Liabilities

Question 17

True or False: In vertical analysis, the Gross Sales or Revenue is the base amount on a P&L statement.

Answer 17

true

Question 18

True or False: Deferred Revenue is considered a Cash Inflow.

Answer 18

true

Question 19

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.

Answer 19

true

Question 20

Which of the following is the bottom line on the P&L statement?

Answer 20

NEt profit

Question 21

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.

Answer 21

false

Question 22

Sales Tax and Payroll Tax are both considered _______________ and found on the ______________.

Answer 22

Liabilities, Balance Sheet

Question 23

Land improvements would be found on which of the following documents?

Answer 23

Balance Sheet

Question 24

Explain Vertical Analysis in reference to Income Statement and Balance sheet

Answer 24

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.

Question 25

Explain Horizontal Analysis

Answer 25

Compares numbers line by line with multiple timeframes being the column head and each line the rows

Question 26

Short term investments

Answer 26

investments going to be cashed within a year

Question 27

Goodwill

Answer 27

intangible asset when a company buys another company for more than fair price