MHA 706 Mod 2 - The Balance Sheet and Statement of Cash Flows fully solved

MHA 706 Mod 2 - The Balance Sheet and Statement of Cash FlowsWhat information does the Income Statement provide? Business operation and profitability What information does the Balance sheet contain? (2) - Assets of an organization - Liabilities and equity of the business, or how the assets are financed In terms of time, what is the difference between Income Statement and Balance Sheet? Income Statement looks at a PERIOD of time Balance Sheet looks at a GIVEN POINT in time. - "As of...." - <Specific Date> What are the components of a Balance Sheet? (2) - Assets (left side) - Liabilities and Equity (right side) What is the main formula on the Balance Sheet? Assets = Liability + Equity better known as: Equity = Assets - Liability What are the values on a business balance sheet based from? Book GAAP values and not market value What is Asset? What is Current Asset? Items or things used that possess or create economic benefit to the business Current Assets: Highly liquid assets with the duration of less than 12 months. What is Cash on a Balance Sheet? What is Cash equivalents on a Balance Sheet? Cash = Actual cash in hand and commercial checking accounts Cash equivalents = Cash-like investments with maturities of three months or less - Bank Certificate of Deposits, etc. What is short-term investments?