SFP
Give an example of a non-current asset
equipment, land, building
Which method is ideal for service businesses in preparing the Statement of Comprehensive Income
Single-step approach
This is suitable if an owner wants total control over the business
Sole Proprietorship
This affects cash inflows and outflows due to the acquisition and sale of non-current assets.
Investing Activities
Which analysis method is also called common-size analysis?
Vertical Analysis
_________ are the obligations or debts of a business to other entities, individuals, or institutions.
Liabilities
The account used in recording the transportation costs of merchandise purchased by a company.
Freight In
It is an element of Statement of changes in equity that increases owner's equity
Profit / Additional Investments
These are the types of Statement of Cash Flows
Direct Method and Indirect Method
The ability of a business to produce a return in terms of the investments made
Profitability
The ___________ of Statement of Financial Position clearly shows the equality between the assets and the liabilities and equity.
account form
Expenses that are not directly related to the merchandising function of a business, but are necessary
Non-operating expenses
What type of business organization where the business's liabilities do not extend to the personal assets of owners
Corporation
Purchase of inventory is classified under _______ activities that result in a decrease in cash flows.
operating
Arrange the order of Financial Statements
I. Statement of Comprehensive Income
II. Statement of Changes in Equity
III. Statement of Financial Position
IV. Statement of Cash Flows
If the TOTAL ASSETS is 140,000, and the TOTAL EQUITY is 90,000, how much is the TOTAL LIABILITIES?
50,000
If the GROSS PROFIT is 100,000 and the TOTAL OPERATING EXPENSES are 45,000, how much is the NET INCOME/PROFIT?
55,000
If net income is positive, and withdrawal are higher than income, the ending capital will
Decrease
Give one example each operating, investing, financing activities.
Operating Activities: sales receipts, collections, expenses, taxes / Investing Activities: buying/selling noncurrent assets and investments / Financing Activities: loans, investments, withdrawals, dividends
If the CURRENT ASSETS is 50,000 and the CURRENT LIABILITIES is 17,000, how much is the working capital?
33,000
Current Assets - 50,000; Non current Assets - 75,000 how much is the total liabilities and equity, and why?
125,000 because Assets = Liabilities + Equity
Sales - 200,000; Sales Returns - 45,000; COGS - 100000; How much is the Gross Profit?
55,000
Differentiate Sole Proprietorship, Partnership, and Corporation
Sole proprietorship - one owner, full control; Partnership - 2 or more owner; divide the profit/loss; Corporation - shareholders; payment is via dividends
The ending cash balance presented in the SCF is reflected on the Statement of ____________
Financial Position or Balance Sheet
Order of Liquidity - CMAIFG
Cash, Marketable Securities, Accounts Receivable , Inventory, Fixed Assets, Goodwill