Module 1 Flashcards
0
Q
What is the Accounting Equation?
A
Assets (Investing) = Liabilities (Nonowner Financing) + Equity (Owner Financing)
1
Q
What equals gross profit?
A
Gross Profit = Revenues - COGS
2
Q
What is the Retained Earnings Equation?
A
Ending RE = Beginning RE + Net Income - Dividends
RE is money the company had earned and is reinvested into the business (instead of distributed as dividends)
3
Q
What is the Return on Assets Equation?
A
ROA = Net Income / Avg Assets
4
Q
What is the Return on Equity equation?
A
ROE = Net Income / Avg Equity
