MGT 8803 SUPPLY CHAIN STUDY GUIDE 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔income before taxes - ✔✔Gross Margin +/- operating income
✔✔Do we include sold off divisions in the income statement? - ✔✔No
✔✔EPS - ✔✔net income/# of shares
✔✔Diluted EPS - ✔✔the earnings per share a company would have based on the total
number of shares including the effects of all stock options and convertible bonds
✔✔Statement of Cash Flows - ✔✔A financial statement that provides financial
information about the cash receipts and cash payments of a business for a specific
period of time.
✔✔What are the sections for a statement of cash flows? - ✔✔Operating, investing,
financing activities
✔✔Operating Activities - ✔✔Cash flow activities that include the cash effects of
transactions that create revenues and expenses and thus enter into the determination of
net income.
✔✔Direct Method - ✔✔A method of determining net cash provided by operating
activities by adjusting each item in the income statement from the accrual basis to the
cash basis. The direct method shows operating cash receipts and payments.
✔✔Indirect method - ✔✔A method of preparing a statement of cash flows in which net
income is adjusted for items that do not affect cash, to determine net cash provided by
operating activities.
✔✔Do international standards permit the indirect method? - ✔✔No
✔✔Investing activities - ✔✔Includes cash transactions involving the purchase and sale
of long-term assets and current investments such as land, building, and equipment
✔✔Financing activities - ✔✔shows change in cash and cash equivalents; cash obtained
from or repaid to owners and creditors
✔✔Which section in the statement of cash flows is most important? - ✔✔operating
section
✔✔Notes - ✔✔summarize accounting policies, assumptions, estimates, and judgments
, ✔✔What are the three audit opinions? - ✔✔unqualified, modified, adverse
✔✔Audit - ✔✔attestation to statements conforming to GAAP and presented fairly; does
not involve accuracy
✔✔Does a CPA produce financial statements? - ✔✔No
✔✔Sarbanes-Oxley Act of 2002 - ✔✔established requirements for proper financial
record keeping for public companies and penalties of as much as 25 years in prison for
noncompliance; mandates auditors must provide opinions on companies internal
controls
✔✔A balance sheet shows what? - ✔✔Claims owners have against the assets of the
firm
✔✔A clean financial statement audit opinion will state that the financial statements are
accurate (t/f) - ✔✔False
✔✔The form of business that is legally separate from its owners - ✔✔Corporation
✔✔Depreciation, deferred revenue, accounts payable, wages payable, dividends
payable - which of these is not a liability? - ✔✔depreciation
✔✔Intangible assets, pre-paid expenses, cash, marketable securities, or accounts
receivable - which is not a current asset? - ✔✔intangible assets
✔✔Dividend expense, marketing expenses, cost of goods sold, depreciation expense,
bad debt expense - which of these is not included as an expense on the income
statement? - ✔✔Dividend expense
✔✔A firm reports the following income statement items for FY2020: sales of
$60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of
goods sold of $34,025,000; and interest expense of $750,000. The firm also declared
and paid $947,250 in dividends in FY2020. What is the amount of the firms Net Income
Before Interest and Taxes? - ✔✔16,410,000
✔✔Does depreciation represent cash outflow from a firm? - ✔✔No
✔✔(True/False). A firm's balance sheet provides a representation of the current market
value for the company. - ✔✔False
✔✔What happens in accrual based accounting? - ✔✔Revenues are recognized when
earned rather than when the cash is collected
QUESTIONS AND SOLUTIONS RATED A+
✔✔income before taxes - ✔✔Gross Margin +/- operating income
✔✔Do we include sold off divisions in the income statement? - ✔✔No
✔✔EPS - ✔✔net income/# of shares
✔✔Diluted EPS - ✔✔the earnings per share a company would have based on the total
number of shares including the effects of all stock options and convertible bonds
✔✔Statement of Cash Flows - ✔✔A financial statement that provides financial
information about the cash receipts and cash payments of a business for a specific
period of time.
✔✔What are the sections for a statement of cash flows? - ✔✔Operating, investing,
financing activities
✔✔Operating Activities - ✔✔Cash flow activities that include the cash effects of
transactions that create revenues and expenses and thus enter into the determination of
net income.
✔✔Direct Method - ✔✔A method of determining net cash provided by operating
activities by adjusting each item in the income statement from the accrual basis to the
cash basis. The direct method shows operating cash receipts and payments.
✔✔Indirect method - ✔✔A method of preparing a statement of cash flows in which net
income is adjusted for items that do not affect cash, to determine net cash provided by
operating activities.
✔✔Do international standards permit the indirect method? - ✔✔No
✔✔Investing activities - ✔✔Includes cash transactions involving the purchase and sale
of long-term assets and current investments such as land, building, and equipment
✔✔Financing activities - ✔✔shows change in cash and cash equivalents; cash obtained
from or repaid to owners and creditors
✔✔Which section in the statement of cash flows is most important? - ✔✔operating
section
✔✔Notes - ✔✔summarize accounting policies, assumptions, estimates, and judgments
, ✔✔What are the three audit opinions? - ✔✔unqualified, modified, adverse
✔✔Audit - ✔✔attestation to statements conforming to GAAP and presented fairly; does
not involve accuracy
✔✔Does a CPA produce financial statements? - ✔✔No
✔✔Sarbanes-Oxley Act of 2002 - ✔✔established requirements for proper financial
record keeping for public companies and penalties of as much as 25 years in prison for
noncompliance; mandates auditors must provide opinions on companies internal
controls
✔✔A balance sheet shows what? - ✔✔Claims owners have against the assets of the
firm
✔✔A clean financial statement audit opinion will state that the financial statements are
accurate (t/f) - ✔✔False
✔✔The form of business that is legally separate from its owners - ✔✔Corporation
✔✔Depreciation, deferred revenue, accounts payable, wages payable, dividends
payable - which of these is not a liability? - ✔✔depreciation
✔✔Intangible assets, pre-paid expenses, cash, marketable securities, or accounts
receivable - which is not a current asset? - ✔✔intangible assets
✔✔Dividend expense, marketing expenses, cost of goods sold, depreciation expense,
bad debt expense - which of these is not included as an expense on the income
statement? - ✔✔Dividend expense
✔✔A firm reports the following income statement items for FY2020: sales of
$60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of
goods sold of $34,025,000; and interest expense of $750,000. The firm also declared
and paid $947,250 in dividends in FY2020. What is the amount of the firms Net Income
Before Interest and Taxes? - ✔✔16,410,000
✔✔Does depreciation represent cash outflow from a firm? - ✔✔No
✔✔(True/False). A firm's balance sheet provides a representation of the current market
value for the company. - ✔✔False
✔✔What happens in accrual based accounting? - ✔✔Revenues are recognized when
earned rather than when the cash is collected
