ch2 1. The financial statement showing a firm's accounting value on a particular date is the: A. income statement. B. balance sheet. C. statement of cash flows. D. tax reconciliation statement. E. shareholders' equity sheet. A current asset is: A. an item currently owned by the firm. B. an item that the firm expects to own within the next year. C. an item currently owned by the firm that will convert to cash within the next 12 months. D. the amount of cash on hand the firm currently shows on its
Words: 4872 - Pages: 20
Profit & Loss statement (also referred as Income statement), statement of financial performance, earnings statement, operating statement or statement of operations) is a company's financial statement how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). It displays the revenues recognized
Words: 1393 - Pages: 6
Introduction Many argue that the cash flow statement is the most important of the financial statements. This actually quite sound of an argument considering that once a business, particularly small and medium enterprises (SMEs), runs out of cash, it usually winds up out of business soon after. One other reason that cash flow statements are important is the comparability they offer. Cash flow statements can be used to clearly assess the health of one business from another largely because across most
Words: 2023 - Pages: 9
Financial Statements Financial information is the heart of business management. Businesses report information in the form of financial statements on a periodic basis. The most common financial statements are the Consolidated Statement of Earnings (income statement), balance sheet and statement of cash flows. Each of these financial statements are important to a business for a different reason. Today, we will look at these financial statements, examine the importance and show what business
Words: 999 - Pages: 4
lists all the accounts that a company uses in its accounting system. The accounts are usully organized into the following sequence. 1. Asset accounts Examples: * Cash | (Amount of cash on hand) | * Accounts Receivables | (Amount owed to the company for services performed or products sold, where the cash has not yet been received) | * Property and Equipment | (Amount of land, buildings and equipment) | * Prepaid Insurance | (Insurance paid in advance, but not yet
Words: 1296 - Pages: 6
Financial Statements Patty Reagan ACC/561 September 24, 2012 Bethany Kessel Financial Statements The financial statements of a company give the reader a view of the financial health of the company. The four major reports are the income statement, balance sheet, cash flow statement, and the statement of shareholders’ equity. By understanding the statements and how they relate to one another can help any individual to understand the financial position of the company and will aid in making
Words: 887 - Pages: 4
Topic: Cash basis versus Accrual basis of accounting The cash basis of accounting, sometimes called cash accounting, is still used by some small companies whose business activity is uniform throughout the year--receiving and disbursing roughly the same amount of cash each month. Many individuals also use cash accounting.( Edmonds, McNair, Milam, and Olds, Fundamental Financial Accounting Concepts, 4th edition, McGraw-Hill Irwin, 2002) In the cash basis of accounting, the business records are "cash
Words: 1465 - Pages: 6
CHAPTER 6 STATEMENT OF CASH FLOWS Questions, Exercises, and Problems: Answers and Solutions 6.1 6.2 See the text or the glossary at the end of the book. One can criticize a single income statement using a cash basis of accounting from two standpoints: (1) it provides a poor measure of operating performance each period because of the inaccurate matching of revenues and expenses (see discussion in Chapter 4), and (2) it excludes important investing (acquisitions and sales of long-lived assets) activities
Words: 9785 - Pages: 40
CONCEPTS a. The statement of cash flows details the actual cash generated through a specific time period, usually for fiscal year ending 20XX, for example. The cash flow statement, specifically, identifies the actual cash flowing in and out of the company and reveals how a company spends its money. Conversely, the income statement is based on the accrual method of accounting and will contain revenue, for example, that has not been received or expenses that have not yet been paid. b. The
Words: 532 - Pages: 3
balance sheet for Cornell Corp. based on the following information: cash = $143,000; patents and copyrights = $630,000; accounts payable = $220,500; accounts receivable = $115,000; tangible net fixed assets = $1,660,000; inventory = $301,000; notes payable = $120,000; accumulated retained earnings = $1,246,000; long-term debt = $861,000. (Be sure to list the accounts in order of their liquidity.) CORNELL COP. Balance Sheet Assets Cash Accounts receivable Inventory Current assets Tangible net fixed assets
Words: 3673 - Pages: 15
