Homework 1.4

A balance sheet reports the​ company's financial position over a period of time.

false

Every corporation must pay dividends every year.

false

Net income is the profit left over after subtracting expenses and dividends from revenues and gains.

false

Revenues and expenses are reported on both the income statement and the statement of retained earnings.

false

The amount of cash received on the sale of the​ company's stock in excess of par value is called retained earnings.

false

The balance sheet is organized in terms of the​ organization's operating,​ investing, and financing activities.

false

The statement of cash flows measures operating performance.

false

The financial statement that reports revenues and expenses is called the

income statement

Which financial statement would show how well a company performed over the past​ year?

income statement

If you could pick a single source of cash for your​ business, what would it​ be? Why?

the single best source of cash for a business is operating activities. This source of cash is best because it results from the core operations of the business. Operating activities should be the main source of cash for a business.

Each category of activities on the statement of cash flows results in net cash provided or net cash used.

true

The balance sheet is also called the statement of financial position.

true

The statement of retained earnings shows both the beginning and ending balances of retained earnings.

true

How do the assets and owners' equity of Apple, Inc. differ from each other? Which one (assets or owners' equity) must be at least as large as the other? Which one can be smaller than the other?

Assets are the economic resources of a business that are expected to be of benefit in the future. Owners' equity represents claims to the assets held by the owners of the business Assets must be at least as large as owners' equity. Owner's equity can be smaller than assets.

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -accounts payable

B

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -common stock

B

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -inventory

B

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -long term debt

B

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -How much in total debt does the company have?

B

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -What assets does the company have?

B

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -What is the company's financial position at the end of the year?

B

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -cash

B,C

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -retained earnings

B,R

How can a business be unprofitable several years in a row and still have plenty of​ cash?

Borrowing money, issuing stock to stockholders, and selling land, buildings and equipment can bring in cash even when the company has experienced losses.

How are​ Nike, Inc.'s liabilities and​ stockholders' equity​ similar? Different?

Both liabilities and owners' equity are claims to assets. Liabilities are the outsider claims to the assets of a business. Owners' equity represents the insider claim to the assets of the business

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -Net cash used for financing activities

C

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -increase or decrease in cash

C

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -net cash provided by operating activities

C

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -How much cash did the company generate and spend during the year?

C

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -How much cash was generated by operating activities?

C

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -Dividends

C, R

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -net income

C,I,R

How can a business earn large profits but have a small balance of retained​ earnings?

Paying large dividends will cause retained earnings to be low.

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -Did the company declare a dividend during the year?

R

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -Why did the company's retained earnings change during the year?

R

identify the two basic categories of items on an income statement.

Revenues and expenses

Quartz Instruments had retained earnings of $390,000 at December​31, 2017. Net income for 2018 totaled $210,000​, and dividends declared for 2018 were $60,000. How much retained earnings should Quartz report at December​31, 2018​?

$540,000

Mason Corporation began the year with cash of $141,000 and land that cost $20,000. During the year Mason earned service revenue of $260,000 and had the following​expenses: salaries, $175,000​; ​rent, $73,000​; and​utilities, $25,000. At​year-end Mason​'s cash balance was down to $19,000. How much net income​(or net​loss) did Mason experience for the​year?

(13,000)

Give two reasons why a business can have a steady stream of net income over a 6 year period and still experience a cash shortage

Heavy investing, paying off debts

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -Salary Expense

I

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -interest value

I

Identify each item with its appropriate financial​ statement, using the following​ abbreviations: Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C) -sales revenue

I

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -How well did the company perform during the year?

I

Income statement​ (I), Statement of retained earnings​ (R), Balance sheet​ (B), and Statement of cash flows​ (C). -What were the company's net sales for the year?

I

What do we call the bottom line of the income​ statement?

Net income (or net loss)

all of the following are current assets except? accounts payable, prepaid expenses, inventory, or accounts receivable

accounts payable

On which financial statement would the ending balance of the account​ "accounts receivable" be​ found?

balance sheet

The amount a company expects to collect from customers appears on the

balance sheet in the current assets section.

Cash paid to purchase a building appears on the statement of cash flows among the

investing activities

What item flows from the income statement to the statement of retained​ earnings?

net income

What item flows from the statement of retained earnings to the balance​ sheet?

retained earnings

Another name for the balance sheet is the

statement of financial position

Net income appears on which financial​ statement(s)?

statement of retained earnings and income statement