Wall Street Prep 100% Aswered 2024
Assets -CORRECT ANS-resources a company uses to operate its business
includes cash, A/R, PP&E
Liabilities -CORRECT ANS-represents the company's contractual obligations and includes A/P, debt,
accrued expenses
Shareholder's equity -CORRECT ANS-is the residual
the value of the business available to the owners (shareholders) after debts have been paid off
Income statement -CORRECT ANS-illustrates the profitability of the company over a specified period of
time
broad sense: shows revenue-expenses
Balance sheet -CORRECT ANS-snapshot of the company economic resources and funding for those
resources at a given point in time (A = L + SE)
Revenue -CORRECT ANS-"top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the time of transaction)
Expenses -CORRECT ANS-netted against revenue to arrive at net income
, COGS (directly associate with good production), SG&A (indirectly associated with production), interest
expense (expense related to paying debt holders periodic payments), taxes, depreciation expense (non-
cash expense accounting for the use of PP&E, often imbedded within COGS and SG&A)
Net income -CORRECT ANS-"bottom-line"
revenue-expenses
the profitability available to common shareholder's after debt payments have been made (interest
expense)
EPS (earnings per share) -CORRECT ANS-portion of a company's profit allocated to each outstanding
share of common stock
EPS = (net income - dividends on preferred stock)/weighted average shares outstanding
Cash flow statement -CORRECT ANS-While cash is not necessarily received when a sale occurs, the
income statement still records the sale. As a result, the income statement captures all the economic
transactions of the business.
The cash flow statement is needed because the income statement uses what is called accrual
accounting. In accrual accounting, revenues are recorded when earned regardless of when cash is
received (revenue includes sales using cash and made on credit A/R)
Since we also want to have a clear understanding of the cash position of a company, we need the
statement of cash flows to reconcile the income statement to cash inflows and outflows.
"cash position of the company"
cash from operating activities, cash from investing activities, and cash from financing activities
Cash from operating activities -CORRECT ANS-mostly indirect method
Assets -CORRECT ANS-resources a company uses to operate its business
includes cash, A/R, PP&E
Liabilities -CORRECT ANS-represents the company's contractual obligations and includes A/P, debt,
accrued expenses
Shareholder's equity -CORRECT ANS-is the residual
the value of the business available to the owners (shareholders) after debts have been paid off
Income statement -CORRECT ANS-illustrates the profitability of the company over a specified period of
time
broad sense: shows revenue-expenses
Balance sheet -CORRECT ANS-snapshot of the company economic resources and funding for those
resources at a given point in time (A = L + SE)
Revenue -CORRECT ANS-"top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the time of transaction)
Expenses -CORRECT ANS-netted against revenue to arrive at net income
, COGS (directly associate with good production), SG&A (indirectly associated with production), interest
expense (expense related to paying debt holders periodic payments), taxes, depreciation expense (non-
cash expense accounting for the use of PP&E, often imbedded within COGS and SG&A)
Net income -CORRECT ANS-"bottom-line"
revenue-expenses
the profitability available to common shareholder's after debt payments have been made (interest
expense)
EPS (earnings per share) -CORRECT ANS-portion of a company's profit allocated to each outstanding
share of common stock
EPS = (net income - dividends on preferred stock)/weighted average shares outstanding
Cash flow statement -CORRECT ANS-While cash is not necessarily received when a sale occurs, the
income statement still records the sale. As a result, the income statement captures all the economic
transactions of the business.
The cash flow statement is needed because the income statement uses what is called accrual
accounting. In accrual accounting, revenues are recorded when earned regardless of when cash is
received (revenue includes sales using cash and made on credit A/R)
Since we also want to have a clear understanding of the cash position of a company, we need the
statement of cash flows to reconcile the income statement to cash inflows and outflows.
"cash position of the company"
cash from operating activities, cash from investing activities, and cash from financing activities
Cash from operating activities -CORRECT ANS-mostly indirect method
