AEM 1200 Final Study Guide questions with correct answers

Balance Sheet - Answer A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equity. Income Statement - Answer A financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time. Statement of Cash Flows - Answer Financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing. Accounting Equation - Answer Assets = Liabilities + Owner's Equity Objectives of financial statement analysis - Answer Find out how liquid, profitable and efficient an enterprise is Ratio analysis - Answer Dependent on industry, size, and interdependence Current ratio - Answer Current assists/ current liabilities Acid (quick) ratio - Answer (Current assets-inventory)/ current liabilities