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|Purchasing resources that a company needs in order to operate is called
|The income statement does not report cash received from the sale of stock because it is not considered revenue (T/F)
|Which financial statement provides information for a specific point in time?
|Which financial statement summarizes the financial position of a company?
|The ________ in an annual report give a fair depiction of a company’s financial position and operating results.
|Q 1.24: The notes to the financial statement are _____ brief and few in number.
|Q 1.21: In an annual report, which of the following contains explanations of uncertainties and contingencies regarding the company’s financial statements?
|notes to the financial statements
|When a manufacturer uses its resources to produce goods to sell to other companies, it is engaging in
|Q 1.82: When a company buys stock in another company, it is called a financing activity. (T/F)
|purchasing the resources the company needs in order to operate
|Order of Financial Statements?
|Income Statement, Ret. Earnings Statement, Balance Sheet
|"get capitol' get a loan, increase liabilities. Get Equity by issuing stock. Borrow form creditors.
|buying and selling ASSETS. ex. land, building, equipment
|day to day operations. Generate REVENUES (from sales or service). Subtract EXPENSES "cost of doing business"
|Revenue-expenses=net income/loss. Reports the success or failure of a business for a period of time (month, qtr, year)
|Retained Earnings Statment
|Beginning Balance in Ret. Earnings at Jan 1st + Net income - dividends = Ending Balance in Retained Earning at Dec. 31st (covers a time period)
|Shows only a point in time. Assets=Liabilities + Stockholders Equity. "The basic accounting equation"
|Statement of Cash Flows
|financial info and cash receipts from operating, investing, and financing activities
|What affects stockholder equity?
|R.E.D. Revenue, expenses, dividends.
|Stockholders’ equity represents
|claims of owners
|Annual Report (4 parts)
|required by SEC for publicly held cooperations. Must have four financial statements, managements discussion and analysis, notes to financial statements, and auditors report
|Management Discussion and Anaysis
|presents highlights of favorable or unfavorable trends and identifies significant events and uncertainties affecting a company’s ability to pay near-term obligations, and a company’s ability to fund operations and expansion
|Notes to Financial tatmnts
|discolse details of accounts and methods used.
|must be done by outside CPA, an unqualified opinion is a favorable result