FIN 306 INVESTMENT ANALYSIS 2026
REVIEW PAPER ANSWERS COMPLETE
LEARNING PACK
◉ which is an expense: cash, accounts payable, cost of goods sold
Answer: cost of goods sold
◉ what is the definition of an expense
Answer: amount of assets consumed through business
◉ which group establishes financial accounting rules in us
Answer: fasb- financial accounting standards board
◉ what is the impact of expenses on the account equation
Answer: expenses decrease owners equity
◉ which types of account are accounts pyble and notes pyble
examples of
Answer: liability
◉ how is gross profit computed
,Answer: sales minus cost of goods sold
◉ what is accounts payable
Answer: the amount owed by a company that puchased goods or
services from a supplier on credit
◉ forecasting inflow/outflow
Answer: 1st step in determining if company will experience cash
shortage or surplus in future
◉ budgeting cash receipts
Answer: accounts receivable, allows forecasting cash receipts and
develop cash budget which allows company to anticipate $ needs
◉ cash budget
Answer: short term schedule of expected cash inflow and outflow
during period
◉ who needs a budget more: start up company or a well established
company
Answer: a start up company
◉ budgeting
, Answer: estimating how much revenue will be received or how
many products will be sold & determining how much production
must occur to meet that demand
◉ Master budget begins with what
Answer: sales budget
◉ sales budget
Answer: what are we going to sell; start budget; forecasting sales,
hardest part of the budgeting bc all other budgets follow this one. if
inaccurate, the other budgets will be too.
◉ production budget- what is and equation
Answer: how are we going to pay for forecasted sales, how many
workers needed, etc. now we know how much we need we can
determine how many units needed to make during this period by
seeing how many units you already have on hand, and how many
units you would like to have at the end
units anticipated to sell + units needed on hand at end - how many
you already have on hand
◉ direct materials budget- what is it and equation
Answer: now that we know what we need and how much more to
make we start to look at what materials are needed to make these
products. raw materials we have and how much more we need
REVIEW PAPER ANSWERS COMPLETE
LEARNING PACK
◉ which is an expense: cash, accounts payable, cost of goods sold
Answer: cost of goods sold
◉ what is the definition of an expense
Answer: amount of assets consumed through business
◉ which group establishes financial accounting rules in us
Answer: fasb- financial accounting standards board
◉ what is the impact of expenses on the account equation
Answer: expenses decrease owners equity
◉ which types of account are accounts pyble and notes pyble
examples of
Answer: liability
◉ how is gross profit computed
,Answer: sales minus cost of goods sold
◉ what is accounts payable
Answer: the amount owed by a company that puchased goods or
services from a supplier on credit
◉ forecasting inflow/outflow
Answer: 1st step in determining if company will experience cash
shortage or surplus in future
◉ budgeting cash receipts
Answer: accounts receivable, allows forecasting cash receipts and
develop cash budget which allows company to anticipate $ needs
◉ cash budget
Answer: short term schedule of expected cash inflow and outflow
during period
◉ who needs a budget more: start up company or a well established
company
Answer: a start up company
◉ budgeting
, Answer: estimating how much revenue will be received or how
many products will be sold & determining how much production
must occur to meet that demand
◉ Master budget begins with what
Answer: sales budget
◉ sales budget
Answer: what are we going to sell; start budget; forecasting sales,
hardest part of the budgeting bc all other budgets follow this one. if
inaccurate, the other budgets will be too.
◉ production budget- what is and equation
Answer: how are we going to pay for forecasted sales, how many
workers needed, etc. now we know how much we need we can
determine how many units needed to make during this period by
seeing how many units you already have on hand, and how many
units you would like to have at the end
units anticipated to sell + units needed on hand at end - how many
you already have on hand
◉ direct materials budget- what is it and equation
Answer: now that we know what we need and how much more to
make we start to look at what materials are needed to make these
products. raw materials we have and how much more we need
