D774 - Section 2 -
Lesson 4 with correct
questions and answers
usr
[COMPANY NAME] [Company address]
, 1. Balance Sheet Answer: Prepared as of a point in time
2. articulation Answer: relationship between an operating statement (the income statement or the
statement of cash
flows) and comparative balance sheets
an item on the operating statement helps explain the change in an item on the balance sheet from one
period to the next
3. statement of retained earnings Answer: shows how the retained earnings balance
changes from one period
to the next
4. retained earnings increase when Answer: a company reports net income
5. reatined earnings decrease when Answer: a company distributes earnings to owners
through paying
dividends or has a net loss
6. The interrelationships between 3 financial statements provide insite
into the changes in chase and retained earnings balances between 2
consecutive periods' balance sheets Answer:
7. Because cash and retained earnings balances are such important
parts of the balance sheet, understanding company's income statement
and cash flow statement is key for understanding the balance sheet and
determining how the numbers changed Answer:
8. Articulation between the financial statements helps financial statement
users see the complete financial picture of a company and understand
what causes changes in financial statement balances Answer:
9. Here are some financial statement items for Esalante
Company. net income for the year
net increase or decrease in cash during the
year dividends paid during the year
total assets at the end of the year
cash balance at the beginning of the year
retained earnings at the beginning of the year
which of these items are needed to compute Esalante's ending cash
balance for the year? Answer: cash balance at the beginning of the year and net increase or
decrease in cash during the year
10. Income Statements and Cash Flow Statements Answer: show financial
information over a period
of time
2/
7
Lesson 4 with correct
questions and answers
usr
[COMPANY NAME] [Company address]
, 1. Balance Sheet Answer: Prepared as of a point in time
2. articulation Answer: relationship between an operating statement (the income statement or the
statement of cash
flows) and comparative balance sheets
an item on the operating statement helps explain the change in an item on the balance sheet from one
period to the next
3. statement of retained earnings Answer: shows how the retained earnings balance
changes from one period
to the next
4. retained earnings increase when Answer: a company reports net income
5. reatined earnings decrease when Answer: a company distributes earnings to owners
through paying
dividends or has a net loss
6. The interrelationships between 3 financial statements provide insite
into the changes in chase and retained earnings balances between 2
consecutive periods' balance sheets Answer:
7. Because cash and retained earnings balances are such important
parts of the balance sheet, understanding company's income statement
and cash flow statement is key for understanding the balance sheet and
determining how the numbers changed Answer:
8. Articulation between the financial statements helps financial statement
users see the complete financial picture of a company and understand
what causes changes in financial statement balances Answer:
9. Here are some financial statement items for Esalante
Company. net income for the year
net increase or decrease in cash during the
year dividends paid during the year
total assets at the end of the year
cash balance at the beginning of the year
retained earnings at the beginning of the year
which of these items are needed to compute Esalante's ending cash
balance for the year? Answer: cash balance at the beginning of the year and net increase or
decrease in cash during the year
10. Income Statements and Cash Flow Statements Answer: show financial
information over a period
of time
2/
7
