Cash Flow Statement
What is the primary purpose of a cash flow statement?
The primary purpose of a cash flow statement is to provide information about a company's cash inflows and outflows during a specific accounting period.
What is the purpose of a balance sheet?
The purpose of a balance sheet is to provide a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and owner's equity.
What is the primary purpose of an income statement?
To report a company’s revenue, expenses, and earnings during a specific accounting period.
Define Assets.
Assets are resources owned by a company or individual, such as cash, inventory, and property.
Who is the first President of the United States?
George Washington.
Name the three main sections of a cash flow statement.
The three main sections of a cash flow statement are Operating Activities, Investing Activities, and Financing Activities.
Name three components of a balance sheet.
The three components of a balance sheet are Assets, Liabilities, and Owner's Equity.
Name three components of an income statement.
Revenue, Cost of Goods Sold (COGS), Operating Expenses.
Explain Liabilities.
Liabilities are debts owed to non-shareholders or outside parties, such as rent, taxes, and employee wages.
Name three presidents who served during the 20th century.
Theodore Roosevelt, Franklin D. Roosevelt, and Ronald Reagan.
Define Operating Activities in the cash flow statement.
Operating Activities in the cash flow statement include cash flows from day-to-day business operations, such as revenue and expenses.
Define Assets on the balance sheet.
Assets on the balance sheet represent resources owned by the company.
Define Gross Profit.
Profit is the revenue generated from sales or services minus the direct costs associated with producing goods or services.
What is Equity?
Equity is the amount due to the owners of the business and is often shown as net worth. It represents the money owed to shareholders or owners.
Define the term "president" in the context of a government system.
A president is the head of state or head of government, responsible for leading the executive branch and implementing policies.
What do Investing Activities include?
Investing Activities include cash flows from buying or selling assets.
What are Liabilities?
Liabilities on the balance sheet represent debts and obligations owed by the company to external parties, such as loans, accounts payable, and expenses.
What are Operating Expenses?
Operating Expenses are the costs from running the business, excluding the costs directly associated with producing goods or services.
What is the relationship between Assets and Liabilities?
The relationship between Assets and Liabilities is that Assets represent what the company owns, while Liabilities represent what the company owes.
What are some responsibilities typically associated with the role of a president?
Responsibilities may include serving as commander-in-chief of the military, representing the country in diplomatic affairs, enforcing laws, and appointing government officials.
How do Financing Activities contribute to a company's cash flow statement?
Financing Activities on the cash flow statement involve cash flows from raising capital or repaying debt.
Explain the Importance of Owner's Equity on the balance sheet.
Owner's Equity on the balance sheet represents the interest in the company's assets after deducting its liabilities. Represents the company's net worth or book value.
How do external stakeholders, such as investors, use the income statement?
External stakeholders use the income statement to understand whether a company operates efficiently and is likely to succeed in the future.
What equation can be used to calculate Equity on a balance sheet?
The equation used to calculate Equity on a balance sheet is Assets minus Liabilities equals Equity.
How is a president typically elected in democratic systems like the United States?
A president is typically elected through a process involving nationwide elections, where citizens vote for who they want, often through an electoral college system.