Financial Intelligence
- What is the Balance Sheet?
- How is Profitability like a grade you receive for a course and Equity is like your GPA?
- Define “Equity”
- Define “Retained Earnings”
- How can Retained Earnings show a negative balance?
- What is the Accounting equation?
- The Balance Sheet shows the company’s financial position at a point in time. TRUE/FALSE
- Reference the Balance Sheet in the Appendix and enter the account balances:
- Assets ____________Liabilities____________Equity___________ for 12/31/2012
- Retained Earnings ______________12/31/12
- Inventory ___________ 12/31/11
- Current Assets ______________12/31/11
- Current Liabilities _____________12/31/12
- Give an example of a cash equivalent.
- Define the account “Allowance for Bad Debts”
- Why are assets, such as, Property, Plant and Equipment recorded at cost?
- Land is a depreciable asset. TRUE/FALSE
- Define “Goodwill”
- Goodwill is amortized over a 30 year period. TRUE/FALSE
- Give an example of an Intangible Asset.
- How should Intangible Assets be amortized?
- Define “Current Liabilities” and “Long Term Liabilities” and give an example of each
- What is the primary difference between Common and Preferred stock?
- Define “Dividends”
- Dividends are paid out of Retained Earnings. TRUE/FALSE
- List the fundamental accounting equation.
- Using the Balance Sheet in the appendix, enter the following for 12/31/12
- Assets ____________
- Liabilities ____________
- Equity ____________
- The net income or loss is transferred to what Balance Sheet account?
- Why could the purchase of raw materials at a “good deal” adversely affect the Balance Sheet.
Part 4
- Define Owner Earnings.
- Profit is not the same as Cash. TRUE/FALSE
- List the three reasons why profit is not the same as cash
- _________________________________________
- _________________________________________
- _________________________________________
- What is the disparity regarding Sweet Dreams with respect to customer receipts and vendor payments?
- In the case of Fine Apparel, how can the company lose money every month yet have a positive cash flow?
- What are the three categories of cash flow as reported on the Statement of Cash Flows?
- __________________________________________
- __________________________________________
- __________________________________________
- Investing activities refers to investments made by the company not by its owners. TRUE/FALSE
- Why would you add depreciation to net income on the Statement of Cash Flows?
- Give an example of an Operating activity?
- Give an example of an Investing activity?
- Give an example of a Financing activity?
- Define Free Cash Flow
- Accounting