Insider Claims Of A Business
Question: asset
Answer: An economic resource that is expected to benefit future operations
Question: owner’s equity
Answer: Represents the insider claims to the assets held by the owners of the business.
Question: liabilities
Answer: The outsider claims to the assets of a business
Question: income statement
Answer: Reports revenues and expenses of the year, and net income or net loss
Question: statement of retained earnings
Answer: Opens with the beginning retained earning balance, adds net income (or subtracts net loss), subtracts dividends, reports the retained earnings balance at the end of the year
Question: balance sheet
Answer: Reports assets, liabilities, and stockholders’ equity at the end of the year. Reports that assets=liabilities+stockholders’ equity, and retained earnings
Question: statement of cash flows
Answer: Reports cash flows from operating, investing, and financing activities. Each category results in net cash provided or used. Reports whether cash increased or decreased during the year, shows ending cash balance
Question: financial statement that covers a period of time
Answer: Income statement; statement of cash flows
Question: The valuation of assets on the balance sheet is generally based on
Answer: historical cost
Question: The primary objective of financial reporting is to provide information
Answer: useful for making investment and credit decisions