Set 1 - Core Concepts

Question 0

Income Statement Formula

Answer 0

Revenues - Expenses = Net Income

Question 1

Balance Sheet Formula

Answer 1

Assets = Liabilities + Owner’s Equity

Question 2

Statement of Stockholder’s Equity Formula

Answer 2

Beginning Retained Earnings
\+                             Net Income
-                                Dividends
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
        Ending Retained Earnings

Question 3

Statement of Cash Flows Formula

Answer 3

\+/- cash flows from operating act.
\+/- cash flows from investing act. 
\+/- cash flows from financing act.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
                              change in cash 
\+              beginning cash balance
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
                     ending cash balance

Question 4

CFO

Answer 4

Cash flows from operating activities

Question 5

CFI

Answer 5

Cash flows from investing activities

Question 6

CFF

Answer 6

Cash flows from financing activities

Question 7

Typical CFO items

Answer 7

Cash flows directly related to earning income, salaries to production employees, bills from suppliers

Question 8

Typical CFI items

Answer 8

Cash flows related to equipment and plant investments, other investments

Question 9

Typical CFF items

Answer 9

Cash flows related to the financing of the business including receipt and payment of money to investors and creditors.

Does not include money paid to suppliers.

Question 10

On a balance sheet, assets are listed in what order?

Answer 10

By ease of conversion to cash (i.e. cash first)

Question 11

On balance sheet, liabilities are listed in what order?

Answer 11

By their maturity dates (due dates)