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Exam 2: Financial Statements

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Question 31

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Describe some of the items often disclosed in the financial notes.

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Some of the items often disclosed in the...

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Question 32

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Use the information below for the Michigan Auto Corporation (MAC) to answer the following question. Balance Sheet Accounts of Michigan Auto Corporation (MAC) Corporation $\begin{array} { | l | c | } \hline \text { Account } & \text { Balance 12/31/2017 } \\\hline \text { Accumulated depreciation } & \$ 7,650 \\\hline \text { Accounts payable } & \$ 6,875 \\\hline \text { Accounts receivable } & \$ 8,000 \\\hline \text { Cash } & \$ 3,750 \\\hline \text { Common stock } & \$ 15,625 \\\hline \text { Inventory } & \$ 11,250 \\\hline \text { Long-Term debt } & \$ 17,750 \\\hline \text { Plant, property, and equipment } & \$ 37,000 \\\hline \text { Retained earnings } & \$ 12,100 \\\hline\end{array}$ -Refer to the Balance Sheet Accounts of MAC Corporation.The value of equity for the year-end is ________.

A) $11,740
B) $16,625
C) $11,090
D) 27,725

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Question 33

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An increase in current assets is a source of cash.

Debts to be paid more than one year from now are considered short-term liabilities.

One of the key components to making financial decisions is to ________.

In regards to the Cash Flow Statement,assume we want to break down Yahoo! Finance's cost of revenue into its two major components,cost of goods sold (COGS) and depreciation.To do so,we would need to look at ________ for the depreciation amount.

Which of the following identities is TRUE?

Cash flow from assets is derived from ________.

The cash flow identity states that the cash flow from the left hand side of the balance sheet is equal to the cash flow on the right hand side of the income statement.

Debts to be paid more than one year from now are claims against the firm's assets: in other words,they are long-term liabilities.These claims are from ________ who have provided capital to the firm but whose entire repayment is not due during the coming year or operating cycle.

The fundamental starting point of all the accounting statements is the ________.

The annual report is a regular activity of public firms and is sent to current owners (shareholders)and the SEC,and is also made available to prospective owners,financial analysts,and others interested in a company's performance.Name four of the major sections contained.

Cash and Equivalents are $1,561; Short-Term Investments are $1,000; Accounts Receivables are $3,616; Accounts Payable are $5,121; Short-Term Debt is $288; Inventories are $1,816; Other Current Liabilities are $1,401; and Other Current Assets are $707.What is the amount of Total Current Liabilities?

An increase in borrowing from long-term debt holders is a source of cash.

Which of the following identities is FALSE?

Use the information below for the Michigan Auto Corporation (MAC) to answer the following question. Balance Sheet Accounts of Michigan Auto Corporation (MAC) Corporation $\begin{array} { | l | c | } \hline \text { Account } & \text { Balance 12/31/2017 } \\\hline \text { Accumulated depreciation } & \$ 7,650 \\\hline \text { Accounts payable } & \$ 6,875 \\\hline \text { Accounts receivable } & \$ 8,000 \\\hline \text { Cash } & \$ 3,750 \\\hline \text { Common stock } & \$ 15,625 \\\hline \text { Inventory } & \$ 11,250 \\\hline \text { Long-Term debt } & \$ 17,750 \\\hline \text { Plant, property, and equipment } & \$ 37,000 \\\hline \text { Retained earnings } & \$ 12,100 \\\hline\end{array}$ -Refer to the Balance Sheet Accounts of MAC Corporation.The value of total assets for the year-end is ________.

Cash flow from assets equals cash flow to creditors plus cash flow to stockholders.

Three fundamental issues separate net income and cash flow.Which of the answers below is NOT one of these three fundamental issues?

Which of the statements below is FALSE?

From the finance perspective,there are five principal line accounts of particular interest on the balance sheet: the cash account,the working capital accounts,long-term capital assets accounts,long-term debt accounts,and ownership accounts.Briefly explain each.