CH. 7 Flashcards

1
Q

The general ledger is comprised of these two financial statements..

A

1) The balance sheet

2) The income statement

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2
Q

Who is in charge of managing the general ledger?

A

The Company’s CFO

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3
Q

The balance sheet is comprised of these three sections

A

1) Assets
2) Liabilities
3) Owners equity

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4
Q

Assets =

A

Liabilities + Owners equity

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5
Q

Owners Equity =

A

Assets - Liabilities

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6
Q

Why is owners equity shown as a liability on the balance sheet?

A

Because the company essentially owes that money to the owners.

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7
Q

What are assets?

A

Represents what a GC has. This is a positive entry on the balance sheet.

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8
Q

What is a liability

A

Represents what a GC owes. This is a negative entry on the balance sheet.

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9
Q

Owners equity is

A

net worth or stockholders equity.

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10
Q

What is an income statement

A

The sum of all the business that a company did for a period of time (Usually fiscal year). It combines revenue and cost and is known as the profit and loss statement. It helps to illustrate the current value of a business.

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11
Q

Income statement equation

A
Revenue = cost + profit
Profit = revenue - cost
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12
Q

What are liquidity ratios?

A

These ratios provide short-term analysis and indicates the company’s abilities to pay bills.

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13
Q

What are profitability ratios

A

These ratios reflect longer-term analysis. (ROE/ROI/ROA/EPS/ROR)

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14
Q

What are weekly labor reports?

A

A subset of job cost history that only focuses on direct and indirect labor. Because labor is so risky, it is posted weekly by the HO to the field so jobsite management can make adjustments to the field cont control system.

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15
Q

What is a balance sheet?

A

The balance sheet shows the company’s assets, liabilities and shareholder equity. Investors need all of this information to determine the current value of the company.

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16
Q

What is the difference between the balance sheet and the income statement?

A

Income statement: Represents how much money a company earned or lost over a period of time. The length of this period can vary. The time frame should be clearly indicated on an income statement.

Balance sheet: Gives managers and investors an overview of where the company financially stands at one specific point in time. The balance sheet must be dated and values expressed on it are only accurate as of that date.