Slides

Question 1

What makes a full set of financial statements?

Answer 1

• A statement of financial position (balance sheet)
• Statement of earnings (income statement)
• Statement of comprehensive income
• Statement of cash flows
• Statement of owner’s equity

Question 2

What does a statement of financial position measure?

Answer 2

• Financial risk of short-term liquidity
• Financial risk of long-term solvency over potential growth

Question 3

What does a statement of earnings (income statement) measure?

Answer 3

Performance risk and operating risk

Question 4

What does a statement of comprehensive income measure:

Answer 4

Net income per the income statement plus other comprehensive income

Question 5

What does the Statement of cash flows measure?

Answer 5

Why cash changed. It measures the quality of earnings and growth potential

Question 6

What does the statement of owners’ equity measure?

Answer 6

Why stockholders equity changed

Question 7

What would make the stockholders’ equity change?

Answer 7

• A change in capital
• A change in retained earnings
• A change in accumulated OCI