MA1

Question 1

Statement of financial position (balance sheet)

Answer 1

Financial risk
Short term liquidity
Long term solvency>Potential growth

Question 2

Statement of earnings (income statement)

Answer 2

Performance risk and operating risk

Question 3

Statement of comprehensive income

Answer 3

Net income per the income statement+ other comprehensive income

Question 4

Statement of cash flows

Answer 4

Why cash changed: Indicator of quality of earnings and growth potential

Question 5

Statement of owners’ equity

Answer 5

Why stockholders’ equity changed ( could be due to a change in capital, retained earnings, or accumulated OCI

Question 6

Current assets

Answer 6

Cash and cash equivalents
Trading securities at fare value
Accounts receivable, net of allowance
Notes receivable
Inventory.
Prepaid expenses

Question 7

Investments

Answer 7

Available for sale securities, at fair value
Held to maturity securities
Investment in affiliates

Question 8

Current liabilities

Answer 8

Current position of long term debt
Accounts payable
Notes payable
Interest payable
Salaries payable
Unearned revenue

Question 9

Long term liabilities

Answer 9

Bonds payable
Deferred income tax liability
Pension and other post retirement benefit liabilities

Question 10

Current assets/ current liabilities

Answer 10

Liquidity

Question 11

Debt/ equity

Answer 11

Solvency

Question 12

Intangible assets

Answer 12

Goodwill
Patents, net of amorization

Question 13

Plants’ property and equipment

Answer 13

Land
Building
Equipment
Less: accumulated depreciation

Question 14

Other assets

Answer 14

Pension and post retirement benefit assets
Deferred income tax asset

Question 15

Stockholders’ equity

Answer 15

Capital stock
Preferred stock
Common stock
Paid in capital in excess of par
Retained earnings
Accumulated other comprehensive income
Treasury stock at cost

Question 16

Contributed capital

Answer 16

Capital stock
Preferred stock
Common stock
Paid in capital and excess of car

Question 17

Earned capital

Answer 17

Retained earnings
Accumulated other comprehensive income

Question 18

Plants’ property and equipment

Answer 18

Land
Building
Equipment
Less: accumulated depreciation

Question 19

Balance sheet

Answer 19

Short term and long term financial risk
Capacity to produce

Question 20

Provides a list of assets and liabilities.( classified as current and non current) and equity

Answer 20

Balance sheet.

Question 21

Shows types of assets and liabilities ( current versus long term, tangible versus intangible

Answer 21

Balance sheet

Question 22

Used to evaluate liquidity and long term solvency

Answer 22

Balance sheet

Question 23

Liabilities plus equity=

Answer 23

Assets

Question 24

Assets minus liabilities

Answer 24

Equity

Question 25

Cash and assets expected to convert to cash within one year

Answer 25

Current assets

Question 26

Cash, receivables, prepaids, inventory, short term investments

Answer 26

Current assets

Question 27

Non current, not directly used in operations

Answer 27

Investments and funds

Question 28

Tangible, long lived, used in operations

Answer 28

Property, plant and equipment

Question 29

No physical substance, long lived used in operations

Answer 29

Intangibles

Question 30

Scott corporation sold a fixed asset u used for operations for greater than its carrying amount. Scott should report the transaction and the income statement using the?

Answer 30

Net concept, showing the total gain as part of continuing operations, not net of income taxes