Accounting Game Chapter 8

Business being slow and not knowing why.

Many potential customers are gathered at the softball fields at the park.

Getting a mobile lemonade stand and going to where the customers are.

<p>Reduce them.</p> Signup and view all the answers

<p>2x the straight line base.</p> Signup and view all the answers

<p>$20.00.</p> Signup and view all the answers

<p>Ten years.</p> Signup and view all the answers

<p>To track the change in cash for the week.</p> Signup and view all the answers

<p>$41.</p> Signup and view all the answers

<p>The answer is not provided in the text.</p> Signup and view all the answers

<p>Go to the bank and borrow money</p> Signup and view all the answers

<p>Because the banker and the police wouldn't approve</p> Signup and view all the answers

<p>Having a mobile unit but no lemonade to sell</p> Signup and view all the answers

<p>Use their retained earnings to buy pre-made lemonade</p> Signup and view all the answers

<p>The main lesson is that cash is the driving force of a business, not profits.</p> Signup and view all the answers

<p>The business has zero cash and no cash coming from sales.</p> Signup and view all the answers

<p>The retained earnings are tied up in assets, inventory, and equipment.</p> Signup and view all the answers

<p>Yes, because cash is what runs the business on a daily basis, not profits.</p> Signup and view all the answers

<p>Accelerated depreciation is a method of taking a greater amount of depreciation in the earlier years and less depreciation in the later years.</p> Signup and view all the answers

<p>Saving current dollars is better than saving future dollars because of inflation.</p> Signup and view all the answers

<p>Accelerated depreciation is used by the government to support businesses in buying and selling assets, which stimulates the economy.</p> Signup and view all the answers

<p>$9.00</p> Signup and view all the answers

<p>The individual decides to buy a wagon instead of an expensive mobile refreshment stand.</p> Signup and view all the answers

<p>$20.00</p> Signup and view all the answers

<p>Because it is a different type of fixed asset (equipment), and can be depreciated differently.</p> Signup and view all the answers

<p>The store near the ball park sells in bulk and the price is $10 more than what was paid at Pappy's.</p> Signup and view all the answers

<p>Equipment</p> Signup and view all the answers

<p>To depreciate it differently</p> Signup and view all the answers

<p>$0.00</p> Signup and view all the answers

<p>A store near the ball park</p> Signup and view all the answers

<p>Many potential customers are gathered at the softball fields at the park, and the stand is not mobile to reach them.</p> Signup and view all the answers

<p>The protagonist decides to get a mobile lemonade stand to take to where the crowds are.</p> Signup and view all the answers

<p>The first challenge is the slow business at the lemonade stand despite favorable weather and customer feedback.</p> Signup and view all the answers

<p>Going to the bank and borrowing money, floating a check, putting the squeeze on friends who owe money</p> Signup and view all the answers

<p>They decide to use the old inventory</p> Signup and view all the answers

<p>Using the old inventory could result in a visit from the health inspector and a possible lawsuit</p> Signup and view all the answers

<p>They spend some of their retained earnings</p> Signup and view all the answers

<p>Inventory, a building, an insurance policy, a wagon, etc.</p> Signup and view all the answers

<p>Profits do not necessarily mean that you have cash. Profits are important, but cash is the actual money that you have.</p> Signup and view all the answers

<p>The inventory decreases by $30 and the cash increases by $50.</p> Signup and view all the answers

<p>The earnings decrease by $4 and the cash decreases by $4.</p> Signup and view all the answers

<p>The purpose of filling out the Cash Statement is to track the changes in cash flow for a specific period of time.</p> Signup and view all the answers

<p>Accelerated depreciation is a method of allocating the cost of an asset over its useful life in a way that allows for larger deductions in the early years and smaller deductions in the later years.</p> Signup and view all the answers

<p>Saving current tax dollars is better than saving future tax dollars because the value of money decreases over time due to inflation, making it more advantageous to have a larger deduction in the present.</p> Signup and view all the answers

<p>“I don’t know you, kid,” the clerk replies. “How do I know you will pay it back.”</p> Signup and view all the answers

<p>The protagonist offers to leave their valuable polished rock that they always carry in their pocket for luck.</p> Signup and view all the answers

<p>The manager agrees to let the protagonist open an account, saying that anyone who could get credit from Pappy is probably okay.</p> Signup and view all the answers

<p>The protagonist realizes that they have no cash.</p> Signup and view all the answers

<p>Current assets are assets that are expected to be converted into cash within one year. They are important in financial statements because they provide information about a company's liquidity and ability to meet short-term obligations.</p> Signup and view all the answers

<p>The purpose of the Income Statement is to report the revenues, expenses, and net profit or loss of a company during a specific period of time. It shows how profitable a company is and helps stakeholders evaluate its financial performance.</p> Signup and view all the answers

<p>Gross fixed assets represent the total purchase price of all fixed assets, while net fixed assets are the difference between gross fixed assets and accumulated depreciation. Net fixed assets reflect the net book value of the assets.</p> Signup and view all the answers

<p>The government allows accelerated depreciation for assets that are expected to need replacement early on due to wear and tear. This helps businesses by providing tax incentives to invest in buying and selling assets, which stimulates the economy.</p> Signup and view all the answers