Lecture 1

Question 1

10K

Answer 1

annual financial report

Question 2

SEC

Answer 2

regulatory agency; monitors and enforces legal and fair behavior in US capital markets

Question 3

Balance Sheet

Answer 3

end of reporting period snapshot of what is owned, what is owed, and what is left for owners

Question 4

Income Statement

Answer 4

summary of inflows and outflows over the period

Question 5

SoCF

Answer 5

summary of the change in cash on hand from the beginning of the period to the end of the period

Question 6

SoOE

Answer 6

summary of the change in owners’ claims on the firm from the beginning of the period to the end of the period

Question 7

footnotes

Answer 7

specific details about line items presented in the major financial statements

Question 8

US GAAP

Answer 8

generally accepted acct principles; developed by FASB

Question 9

IFRS

Answer 9

international financial reporting standards; set by IASB

Question 10

assets

Answer 10

items owned by firm

Question 11

liabilities

Answer 11

items the firm owes to creditors

Question 12

net assets

Answer 12

assets-liabilities

Question 13

owners’ equity

Answer 13

owners’ claims to the assets

=net assets

Question 14

retained earnings

Answer 14

cumulative profits kept w/in the firm

Question 15

net income =

Answer 15

= revenues - expenses + gains - losses

Question 16

revenues

Answer 16

inflows to firm from providing goods/services

Question 17

expenses

Answer 17

outflows generated to help create revenues

Question 18

gains

Answer 18

increases in value of firms assets

Question 19

losses

Answer 19

decreases in value of firm assets

Question 20

revenues/expenses vs. gains/losses

Answer 20

rev/exp = associated with fundamental operational transatctions