Balance Sheet, Income Statement and Stockholders' Equity

Question 1

What is the accounting equation?

Answer 1

assets = liabilities + equity

Question 2

The accounting equation is the foundation for what financial statement?

Answer 2

balance sheet

Question 3

How do you calculate net income?

Answer 3

revenue - expenses = net income

Question 4

The net income equation is the foundation for what financial statement?

Answer 4

income statement

Question 5

What are the two main umbrella categories for statement of stockholders’ equity?

Answer 5

contributed capital and retained earnings

Question 6

What are the three types of cash flows included on the statement of cash flows?

Answer 6

operating cash flow, investing cash flow and financing cash flow (IN THAT ORDER!)

Question 7

Which statement(s) is/are taken over a period of time?

Answer 7

cash flows, income statement and stockholders’ equity

Question 8

Which statement(s) is/are taken at a point in time?

Answer 8

the balance sheet

Question 9

cash goes in the __________ category

Answer 9

asset

Question 10

accounts receivable goes in the __________ category

Answer 10

asset

Question 11

inventories goes in the __________ category

Answer 11

asset

Question 12

land goes in the __________ category

Answer 12

asset

Question 13

equipment goes in the __________ category

Answer 13

asset

Question 14

investments goes in the __________ category

Answer 14

asset

Question 15

accounts payable goes in the __________ category

Answer 15

liabilities

Question 16

salaries payable goes in the __________ category

Answer 16

liabilities

Question 17

taxes payable goes in the __________ category

Answer 17

liabilities

Question 18

unearned / deferred revenue goes in the __________ category

Answer 18

liabilities

Question 19

notes payable goes in the __________ category

Answer 19

liabilities

Question 20

long-term debt goes in the __________ category

Answer 20

liabilities

Question 21

when something is paid for “on account,” it goes in the __________ category

Answer 21

liabilities

Question 22

common stock goes in the __________ category

Answer 22

equity

Question 23

retained earnings goes in the __________ category

Answer 23

equity

Question 24

when something is a debit, it goes on the ________ side of the T-chart

Answer 24

left

Question 25

when something is a credit, it goes on the ________ side of the T-chart

Answer 25

right

Question 26

What is the order for things on an income statement?

Answer 26

revenue, COGS, gross profit, expenses, net income

Question 27

How do you calculate retained earnings?

Answer 27

retained earnings = (beginning retained earnings) + (net income) - (dividends)

Question 28

When it comes to the specific type of equity, common stock falls under ___________ ____________

Answer 28

contributed capital

Question 29

When it comes to the specific type of equity, additional paid-in capital falls under ___________ ____________

Answer 29

contributed capital

Question 30

When it comes to the specific type of equity, treasury stock falls under ___________ ____________

Answer 30

contributed capital

Question 31

Retained earnings is the same thing as __________ capital

Answer 31

earned

Question 32

Is cash a current or noncurrent asset?

Answer 32

current

Question 33

Are marketable securities a current or noncurrent asset?

Answer 33

current

Question 34

Are accounts receivable a current or noncurrent asset?

Answer 34

current

Question 35

Is inventory a current or noncurrent asset?

Answer 35

current

Question 36

Are investments a current or noncurrent asset?

Answer 36

noncurrent

Question 37

Is PPE (property, plant and equipment) a current or noncurrent asset?

Answer 37

noncurrent

Question 38

Liabilities are listed in order of __________.

Answer 38

maturity

Question 39

Assets are listed in order of __________.

Answer 39

liquidity (how easily they are converted into cash)

Question 40

Are accounts payable a current or noncurrent liability?

Answer 40

current

Question 41

Are accrued liabilities a current or noncurrent liability?

Answer 41

current

Question 42

Are short-term borrowings a current or noncurrent liability?

Answer 42

current

Question 43

Is deferred (or unearned) revenue a current or noncurrent liability?

Answer 43

current

Question 44

If a liability is current, then it is due __________.

Answer 44

within one year

Question 45

If a liability is noncurrent, then it is due ____________.

Answer 45

in 1+ years

Question 46

Is long-term debt a current or noncurrent liability?

Answer 46

noncurrent

Question 47

Liabilities are purchased “on ___________” or “on ____________”.

Answer 47

on account or on credit

Question 48

What is the set of standards and accepted practices for accounting in the United States called?

Answer 48

the GAAP (Generally Accepted Accounting Principles)

Question 49

marketable securities go in the ______ category

Answer 49

asset

Question 50

prepaid expenses go in the _______ category

Answer 50

asset

Question 51

accounts receivable goes in the _________ category

Answer 51

asset

Question 52

common stock, addtl. paid-in capital, and treasury stock are all this type of equity: ______________________

Answer 52

contributed capital

Question 53

accumulated depreciation is a _________ ___________

Answer 53

contra asset

Question 54

What is the difference between accumulated depreciation and depreciation expense?

Answer 54

Accumulated depreciation is the total accumulated depreciation since the beginning, and depreciation expense is just within that one period of measurement.