Exam 9: Understanding financial Statements

The collection and use of information for the purpose of helping managers guide the operation of the business intelligently and making good management decisions that are consistent with the needs, objectives, and goals of the company are referred to as managerial accounting.

Interest on debt that is projected for the upcoming year would be recorded as a current liability on the income statement.

The net income formula emphasized in the income statement is

The components of an income statement are

The financial statement that details cash inflows and outflows for a period of time is called a -------------------------------.

Depreciation would be an example of a(n) __________ expense.

Another name for an income statement is a P and L statement.

Net operating income is calculated before other income and interest expense.

The statement of owner's equity would include dividends paid to shareholders for a proprietorship.

The ------------------------------- is a summary of what a business owns and owes, and what the owners have invested as of a point in time.

An example of an administrative expense would be

The ------------------------------- approach of preparing an income statement reports revenues when earned and expenses when incurred regardless of when the cash is received and paid.

Financial statement(s) include

If total assets equal $600,000 and total liabilities equal $400,000, then owner's equity equals $1,000,000.

The balance sheet formula is

When a firm purchases a truck, with depreciation taken on the truck and reported on the income statement for that year and succeeding years, the amount paid for the truck purchase at the time of purchase is known as (an) ____________ .

If a mortgage equals $100,000 and the first principal payment of $10,000 is due to be paid 18 months after the loan is made, the amount recorded as a current liability on the balance sheet prepared at the loan origination would be $0.

Accumulated depreciation on equipment is reported as a liability on the balance sheet.

If service revenue is included in net sales for a firm, net sales - cost of goods sold would be

The collection and use of information for purposes of reporting the financial position and performance of a firm to various outside entities such as lenders, investors and suppliers is referred to as -------------------------------.