Types of decisions
In how many categories do we classify the decisions taken in a business?
3 (operating; investing; financing)
Give 2 synonyms for net income
net earnings
net profit
If we subtract the cost of goods sold from the net sales, what do we obtain?
Gross profit
How do we call the account that shows the quantity of money customers owe us?
Accounts receivable
Which source of financing doesn´t have a deadline?
Financing provided by the shareholders
Define a stakeholder
Any person or a business with an interest in the company
Name 2 types of accounts that do appear on the IS (other than the sales and COGS)
utilities (incl.: electricity, Internet, telephone)
salaries
interest expense
taxes
maintenance, etc.
How are the current assets ordered on the BS?
from the most to the least liquid ones
Choosing how much to produce, what price to charge and from what supplier to obtain the raw material would be classifed as _________ type of decision.
operating
What is one key purpose of the financial statements?
Communicate to the stakeholders the decisions taken by the company in a specific period and the results of these decisions.
Another name for an Income Statement?
Profit and Loss statement
Why is a BS classified as a static financial statement?
Because it presents the information as a snapshot at a specific date in the year
name 2 types of stakeholders for the company Apple and give example of one decision that each of them takes in terms of the firm
Shareholder: if it is worth to buy more shares
Supplier: how much stock to send to the company´s manufacturing plant
A liability represents ....?
an obligation for the company that it needs to pay and cannot evade
an external source of financing
Point out 3 sources of revenue
Regular sales of products (either cash or credit ones)
Sale of an asset
Revenue resulting from providing a service
Revenue from interest
How do we classify the liabilities on the BS? Provide an example of each one.
In current and long-term
Current: wages payable; accounts payable
Long-term: mortgage; loans