Labeling Financial Statements

Question 1

ACCOUNTING EQUATION - What Title would you use for when an owner invests money into the company

Answer 1

Capital

Question 2

ACCOUNTING EQUATION - What Title would you use for when an owner withdraws money from the company

Answer 2

Dividends

Question 3

ACCOUNTING EQUATION - The company Purchased Equipment on Credit, Under what titles would you account for this

Answer 3

Equipment and Account Payable

Question 4

ACCOUNTING EQUATION - The company paid salaries, Under what titles would you account for this

Answer 4

Cash and Expenses

Question 5

ACCOUNTING EQUATION - The Company paid in cash a previous credit transaction, Under what titles would you account for this

Answer 5

Cash and Accounts Payable

Question 6

ACCOUNTING EQUATION - The owner withdrew money for personal use, Under what titles would you account for this

Answer 6

Cash and Dividends

Question 7

ACCOUNTING EQUATION - Shareholders invested money by buying stocks, Under what titles would you account for this

Answer 7

Common Stock and Cash

Question 8

ACCOUNTING EQUATION - The company provided services but won’t be paid for another week, Under what titles would you account for this

Answer 8

Revenue and Accounts Receivable

Question 9

ACCOUNTING EQUATION - The company got paid cash for services previously provided, Under what titles would you account for this

Answer 9

Cash and Accounts Receivable

Question 10

What is the Equation for Equity

Answer 10

Capital - Dividends + Revenue - Expenses

Question 11

Is Capital a Liability or a part of Equity

Answer 11

Equity

Question 12

Is Common Stock a Liability or a Part of Equity

Answer 12

Equity

Question 13

What MUST be included above all Financial Statements

Answer 13

Business or Company Name and Period Accounting for

Question 14

What are the Common Titles under the Accounting Equation

Answer 14

ASSETS
Cash
Account Receivable
Supplies
Equipment

LIABILITIES
Bank Loan
Account Payable
Bank Overdraft

EQUITY
Capital
Common Stock
Revenue
Expense
Dividends

Question 15

INCOME STATEMENT - What is the Equation for COGS

Answer 15

Opening Inventory + Purchases − ClosingInventory

Question 16

INCOME STATEMENT - What title would salaries fall under

Answer 16

Operating Expenses - Salaries

Question 17

How do we find the Value for EBITDA

Answer 17

Gross Profit - Operating Expense Total

Question 18

When does EBITDA get used in the Income Statement

Answer 18

After Operating Expense Total

Question 19

What is the Order of Titles for the Income Statement

Answer 19

Income -> COGS -> Gross Profit -> Operating Expenses -> Operating Expense Total -> EBITDA -> EBIT -> EBT -> EAT

Question 20

INCOME STATEMENT - How do we find Gross Profit

Answer 20

Income/Revenue - COGS

Question 21

INCOME STATEMENT - Do you find the Accounts Payable and Receivable on the income statement

Answer 21

NO - Found in Balance Sheet

Question 22

What is OE

Answer 22

Owners Equity

Question 23

What is the layout for the Statement of Owner’s Equity

Answer 23

Name of Company | Date of Statement Period

Opening Capital (oe) or Opening Retained Earning (RE)
+
Further Capital Introduced
+
Profit (EAT)
-
Drawings or Dividend
=
Closing Capital (oe) or Closing Retained Earnings (RE)

Question 24

What is the Layout for a Proprietary Approach Balance Sheet

Answer 24

Name of Company | Date of Statement Period

Current Assets
+
Non-Current Assets
-
Current Liabilities
-
Non-Current Liabilities
=
Owners’ Equity

Question 25

What is the Layout for an Entity Approach Balance Sheet

Answer 25

Name of Company | Date of Statement Period Current Assets + Non-Current Assets = Current Liabilities + Non-Current Liabilities + Owners' Equity