MGT 8803 EXAM 1 FINAL PAPER TEST
BANK PRACTICE SOLUTION 2026
GUARANTEED TO PASS.
⫸ Required Financial Statements. Answer: Balance Sheet
Income Statement
Statement of Shareholder's Equity
Statement of Cash Flows
Statement of Comprehensive Income
⫸ Information (not in Financial Statements). Answer: Financial
Statement Footnotes
Independent Auditor Report
Management Discussions and Analysis (MD&A)
Press Releases
⫸ Balance Sheet. Answer: Describes sources and uses of funds at a
point in time.
This is used for:
Evaluating Capital structure
Assessing risk and future cash flow
⫸ Asset. Answer: Economic resources that are owned or controlled
by a company that have future economic benefit
,Examples:
Cash
Accounts Receivables (A/R)
Inventory
Land
Buildings
Equipment
Copyrights
Investments
⫸ To be reported on the balance sheet, an asset must.... Answer: Be
owned(or controlled) by the company
Must possess expected future economic benefit
⫸ Assets are reported at ______________ cost. Answer: Historical
Assets are not reported at current/market value
⫸ Historical cost is ____________ and market value is
________________.. Answer: Objective, Useful
⫸ Assets can only be reported if they are ________________.
Answer: reliably measurable
,⫸ Liabilities. Answer: Future obligations to pay cash, transfer assets
or provide services to another party
Examples:
Accounts Payable (A/P)
Notes Payable (N/P)
Wages Payable (W/P)
⫸ Owners Equity (Shareholders' Equity). Answer: The ownership
interest in the net assets of an entity
Examples of Owners' Equity:
Capital Stock
Preferred Stock
Retained Earnings (RE)
⫸ Accounting Formula. Answer: Assets = Liabilities + Owners
Equity
⫸ Balance Sheet Format. Answer: -Assets are listed in order of
liquidity
- Liabilities are listed in order of maturity
-Shareholders' Equity has no required order
, ⫸ Current Assets. Answer: comprise assets that can be converted to
cash within a year
⫸ Long-term Assets. Answer: cannot be easily converted to cash
within a year
⫸ Current Liabilities. Answer: have maturities less than one year
Probable future sacrifices of economic benefits arising from present
obligations to other entities resulting from past transactions or events
.• Obligations payable within one year or one operating cycle,
whichever is longer.
• Expected to be satisfied with current assets or by the creation of
other current liabilities.
⫸ Long-Term Liabilities. Answer: have maturities longer than one
year
⫸ Ending Retained Earnings Formula (RE). Answer: Ending
Retained Earnings = Beg. RE + NI - Dividends
⫸ Income Statement. Answer: Shows how much a company earned
(not cash) over a period of time
Helps evaluate past performance and predict future performance as
well as measure risk
BANK PRACTICE SOLUTION 2026
GUARANTEED TO PASS.
⫸ Required Financial Statements. Answer: Balance Sheet
Income Statement
Statement of Shareholder's Equity
Statement of Cash Flows
Statement of Comprehensive Income
⫸ Information (not in Financial Statements). Answer: Financial
Statement Footnotes
Independent Auditor Report
Management Discussions and Analysis (MD&A)
Press Releases
⫸ Balance Sheet. Answer: Describes sources and uses of funds at a
point in time.
This is used for:
Evaluating Capital structure
Assessing risk and future cash flow
⫸ Asset. Answer: Economic resources that are owned or controlled
by a company that have future economic benefit
,Examples:
Cash
Accounts Receivables (A/R)
Inventory
Land
Buildings
Equipment
Copyrights
Investments
⫸ To be reported on the balance sheet, an asset must.... Answer: Be
owned(or controlled) by the company
Must possess expected future economic benefit
⫸ Assets are reported at ______________ cost. Answer: Historical
Assets are not reported at current/market value
⫸ Historical cost is ____________ and market value is
________________.. Answer: Objective, Useful
⫸ Assets can only be reported if they are ________________.
Answer: reliably measurable
,⫸ Liabilities. Answer: Future obligations to pay cash, transfer assets
or provide services to another party
Examples:
Accounts Payable (A/P)
Notes Payable (N/P)
Wages Payable (W/P)
⫸ Owners Equity (Shareholders' Equity). Answer: The ownership
interest in the net assets of an entity
Examples of Owners' Equity:
Capital Stock
Preferred Stock
Retained Earnings (RE)
⫸ Accounting Formula. Answer: Assets = Liabilities + Owners
Equity
⫸ Balance Sheet Format. Answer: -Assets are listed in order of
liquidity
- Liabilities are listed in order of maturity
-Shareholders' Equity has no required order
, ⫸ Current Assets. Answer: comprise assets that can be converted to
cash within a year
⫸ Long-term Assets. Answer: cannot be easily converted to cash
within a year
⫸ Current Liabilities. Answer: have maturities less than one year
Probable future sacrifices of economic benefits arising from present
obligations to other entities resulting from past transactions or events
.• Obligations payable within one year or one operating cycle,
whichever is longer.
• Expected to be satisfied with current assets or by the creation of
other current liabilities.
⫸ Long-Term Liabilities. Answer: have maturities longer than one
year
⫸ Ending Retained Earnings Formula (RE). Answer: Ending
Retained Earnings = Beg. RE + NI - Dividends
⫸ Income Statement. Answer: Shows how much a company earned
(not cash) over a period of time
Helps evaluate past performance and predict future performance as
well as measure risk
