BUSI 303 EXAM 1 STUDY GUIDE 2026
QUESTIONS WITH SOLUTIONS GRADED A+
◉ What is DOW? Answer: Dow Jones Industrial Average; 30 firms
◉ What was in the early 2000s? What about 2008-2009? Answer:
2000s = Dot com bubble
2008-2009 = Great Recession
◉ Why was the market up recently? Answer: 1. Trade deal with
China
- US expected to cut existing tariffs
- China buy more US goods
- Fed drop China as currently manipulation country
◉ What does the SEC require? Answer: submission of annual,
quarterly, and current reports
Must classify into three business activities under GAAP
◉ What are financing activities? Answer: in which the business
acquires capital
,"How does the firm finance operations/business from get go?"
e.g., issue stock for cash; pay dividends out
◉ What are investing activities? Answer: in which the business
acquires long-term assets
e.g., buy equiptment
◉ What are operating activities? Answer: in which the business
provides goods and services to customers
"anything the firm does day to day; catch all"
e.g., purchase inventory to sell
◉ Where do the results of the three business activities go? Answer:
reported in a set of four financial statements
◉ What does the balance sheet show? Answer: What does the
company own and who has claims on those assets?
◉ What does the income statement show? Answer: What is this
year's profit? How did the company earn it?
, ◉ What does the statement of retained earnings show? Answer:
What is the change in accumulated profits?
◉ What does the statement of cash flows show? Answer: How did
the company spend and take in cash? Where did cash come in and
out of firms?
◉ Balance sheet accounting equation? Answer: A = L + OE
◉ What are assets? What are liabilities? What is shareholders'
equity? Answer: A = What the firm owns (ex: car)
"who has claims against the firm's assets"
L = creditor's claims (ex: bank loan)
OE = owners' claims (ex: stockholder)
◉ What is the definition of an asset? Answer: Assets are probable
future economic benefits obtained or controlled by a particular
entity as a result of past transactions or events.
◉ What is the key characteristic of an asset? Answer: FUTURE
ECONOMIC BENEFIT (VALUE)
QUESTIONS WITH SOLUTIONS GRADED A+
◉ What is DOW? Answer: Dow Jones Industrial Average; 30 firms
◉ What was in the early 2000s? What about 2008-2009? Answer:
2000s = Dot com bubble
2008-2009 = Great Recession
◉ Why was the market up recently? Answer: 1. Trade deal with
China
- US expected to cut existing tariffs
- China buy more US goods
- Fed drop China as currently manipulation country
◉ What does the SEC require? Answer: submission of annual,
quarterly, and current reports
Must classify into three business activities under GAAP
◉ What are financing activities? Answer: in which the business
acquires capital
,"How does the firm finance operations/business from get go?"
e.g., issue stock for cash; pay dividends out
◉ What are investing activities? Answer: in which the business
acquires long-term assets
e.g., buy equiptment
◉ What are operating activities? Answer: in which the business
provides goods and services to customers
"anything the firm does day to day; catch all"
e.g., purchase inventory to sell
◉ Where do the results of the three business activities go? Answer:
reported in a set of four financial statements
◉ What does the balance sheet show? Answer: What does the
company own and who has claims on those assets?
◉ What does the income statement show? Answer: What is this
year's profit? How did the company earn it?
, ◉ What does the statement of retained earnings show? Answer:
What is the change in accumulated profits?
◉ What does the statement of cash flows show? Answer: How did
the company spend and take in cash? Where did cash come in and
out of firms?
◉ Balance sheet accounting equation? Answer: A = L + OE
◉ What are assets? What are liabilities? What is shareholders'
equity? Answer: A = What the firm owns (ex: car)
"who has claims against the firm's assets"
L = creditor's claims (ex: bank loan)
OE = owners' claims (ex: stockholder)
◉ What is the definition of an asset? Answer: Assets are probable
future economic benefits obtained or controlled by a particular
entity as a result of past transactions or events.
◉ What is the key characteristic of an asset? Answer: FUTURE
ECONOMIC BENEFIT (VALUE)
