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Questions and Answers
What does the term 'Revenue' refer to?
What does the term 'Revenue' refer to?
Which answer correctly defines 'Assets'?
Which answer correctly defines 'Assets'?
Which statement would an investor review to assess whether a company paid a dividend?
Which statement would an investor review to assess whether a company paid a dividend?
What is the primary purpose of an Income Statement?
What is the primary purpose of an Income Statement?
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What do accountants typically call the money held in your bank account?
What do accountants typically call the money held in your bank account?
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Which of the following is an example of a Long-Term Liability account?
Which of the following is an example of a Long-Term Liability account?
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Which option correctly describes 'Stockholder's Equity'?
Which option correctly describes 'Stockholder's Equity'?
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What is an example of a Current Asset account?
What is an example of a Current Asset account?
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Study Notes
Key Financial Concepts
- Revenue: Total earnings generated by a business from its operations.
- Expenses: The costs incurred in the process of generating revenue.
- Assets: Resources owned by a company that provide future economic benefits.
- Liabilities: Obligations or debts that a company owes to outsiders.
- Stockholder's Equity: The residual interest in the assets of a company after deducting liabilities, often referred to as net worth.
- Dividend: A portion of a company's earnings distributed to shareholders.
Financial Statements and Their Purpose
- Financial Position: Evaluated through the Balance Sheet, which shows the equation Assets = Liabilities + Equity.
- Performance: Assessed using the Income Statement, with the equation Revenue - Expenses = Net Income.
- Dividends: Information found in the Statement of Retained Earnings, which tracks total dividends paid to shareholders.
Cash Reference
- Accountants refer to the money in a bank account as Cash.
Asset and Liability Examples
-
Current Asset Accounts:
- Cash
- Accounts Receivable
-
Long-Term Asset Account:
- Property, Plant, and Equipment (PP&E)
-
Current Liability Account:
- Accounts Payable
-
Long-Term Liability Account:
- Long-Term Debt
-
Equity Accounts:
- Common Stock
- Retained Earnings
-
Revenue Account Example:
- Sales Revenue
-
Expense Accounts:
- Cost of Goods Sold (COGS)
- Operating Expenses
Additional Notes
- Balance Sheet accounts include a comprehensive list that may consist of various asset, liability, and equity accounts.
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Description
Test your knowledge with this quiz on Chapter 1 of Finance. Match terms related to revenue, expenses, and assets with their correct definitions. This exercise will help reinforce your understanding of fundamental financial concepts.
