CAPSIM (100% VERIFIED ANSWERS)

Financial Statements correct answers Reports of a company's financial performance. The three basic types of statements included in an annual report are: the Income Statement, the Balance Sheet, and the Cash Flow Statement. These statements provide different financial perspectives on a company's performance. Income Statement correct answers A financial statement that shows a company's Revenue, Expenses and Net Income. The income statement shows how much profit or loss a company generates over a period of time—a month, a quarter, or a year. The income statement is sometimes referred to as the earnings statement, profit and loss statement, or P&L. The layout is: Revenue - Expenses = Net Income (or Net Profit). It closes out to Retained Earnings after the end of the year. Revenues - Expenses = Net Income Balance Sheet correct answers A means of summarizing a company's financial position at a specific point in time. The Balance Sheet equation is: Assets = Liabilities + Owners' Equity. The "left side" of the Balance Sheet (Assets) shows what the company owns. The "right-side", or labilities an equity, shows who paid for the assets. The Balance Sheet is considered a "snapshot" of company's current financial position. Cash Flow Statement correct answers Shows a company's sources and uses of cash as well as the net change in cash for a company in a given period. It's categories are cash from (1) operating activities, (2) investing activities and (3) financing activities. It shows the flow of cash in, through, and out of the company. Revenue correct answers The amount recognized on the sale of a product or service. (aka Sales) Cost of Goods Sold correct answers Cost of Goods Sold or (COGS). Expenses that are tied to the sale of each unit, primarily direct labor and materials costs. See Variable Costs Variable Costs correct answers Expenses that are tied to the sale of each unit, primarily direct labor and materials costs (aka Cost of Goods Sold) Net Earnings correct answers Net Earnings (See Net Income) Net Income correct answers Net income (or Loss). The income (or loss) of an organization after deducting the expenses, including interest and taxes, incurred in earning that income. It is usually the last amount on the Income Statement. Net Profit correct answers Net Profit. (See Net Income or Net Earnings) Assets correct answers The economic resources of a company. Assets are listed on the Balance Sheet and commonly include cash, accounts receivable, notes receivable, inventories, land, buildings, machinery, equipment, and other investments.