Exam 10: Understanding a Firms Financial Statements

The cash flow statement measures cash flows on

For Webster to understand how his company performed during calendar year 2012,he must begin with firm's financial position on:

Bernard has just learned that on the balance sheet,the assets must equal the ___________ plus the _______________.

Match the term with its definition. a.Balance sheet b.Debt c.Dividend d.Financial leverage e.Mortgage f.Owners' equity g.Retained earnings h.Working capital cycle -Financing provided by creditors

A conventional measure of a firm's liquidity is a comparison of current assets to current liabilities.

XYC Corporation pays its taxes quarterly but withholds payroll taxes from its employees' paychecks each week.Until the taxes are actually paid to the IRS,they appear on the balance sheet as:

The balance sheet shows a firm's assets,liabilities,and owners' equity at a specific point in time.

A profitable company will always have positive cash flows.

Match the term with its definition. a.Accrued expenses b.Cash flow activities c.Cash flow statement d.Fixed assets e.Gross fixed assets f.Long-term debt g.Other assets h.Short-term notes -Agreements to repay cash amounts borrowed from banks or other lending sources within 12 months or less

Match the term with its definition. a.Accounts payable b.Accounts receivable c.Accumulated depreciation d.Common stock e.Current assets f.Current debt g.Current ratio h.Depreciation expense -Outstanding credit payable to suppliers

Match the term with its definition. a.Accounts payable b.Accounts receivable c.Accumulated depreciation d.Common stock e.Current assets f.Current debt g.Current ratio h.Depreciation expense -The amount of credit extended to customers that is currently outstanding

Ignatio applied for a loan for his business that he will repay in 9 months.The best way to describe this loan is as a(n):

Match the term with its definition. a.Accounts payable b.Accounts receivable c.Accumulated depreciation d.Common stock e.Current assets f.Current debt g.Current ratio h.Depreciation expense -The cost of a firm's building and equipment,allocated over the asset's useful life

Accounts payable,accrued expenses,2-year notes payable,and 90-day notes are all short-term liabilities.

Candace purchased a car for her company's exclusive use.The value of this car:

Match the term with its definition. a.Cost of goods sold b.Current ratio c.Debt ratio d.Depreciable assets e.Income statement f.Interest expense g.Inventory h.Net fixed assets -A financial report showing the amount of profits or losses from a firm's operations over a given period of time

Match the term with its definition. a.Accrual-basis accounting b.Cash-basis accounting c.Current ratio d.Financial statements e.Liquidity f.Operating profit margin g.Return on assets h.Return on equity -An accounting method of recording profits when cash is received and recording expenses when they are paid

Match the term with its definition. a.Accounts payable b.Accounts receivable c.Accumulated depreciation d.Common stock e.Current assets f.Current debt g.Current ratio h.Depreciation expense -Assets that can be converted to cash relatively quickly

The three activities that explain the cash inflows and outflows of a business are the operating,selling,and financing activities.

Match the term with its definition. a.Balance sheet b.Debt c.Dividend d.Financial leverage e.Mortgage f.Owners' equity g.Retained earnings h.Working capital cycle -A long-term loan to purchase a building or land