1.4 Learning Objective 1-4
1) Net income is the profit left over after subtracting expenses and dividends from revenues and gains.
2) The balance sheet is also called the statement of financial position.
3) Every corporation must pay dividends every year.
4) The balance sheet is organized in terms of the organization's operating, investing, and financing activities.
5) The amount of cash received on the sale of the company's stock in excess of par value is called retained earnings.
6) The statement of cash flows measures operating performance.
7) A balance sheet reports the company's financial position over a period of time.
8) What is an accounts payable?
A) It is a liability for goods or services purchased on credit and supported by a written agreement.
B) It is a liability for goods or services purchased on credit and supported by the credit standing of the purchaser.
C) It is an amount of money to be received from a supplier.
D) It is an asset arising from the sale of goods or services on credit.
9) Which financial statement answers the following question: What is the company's financial position?
A) statement of cash flows
B) income statement
C) statement of retained earnings
D) balance sheet
10) Which financial statement answers the following question: What is the company's operating performance over the past year?
A) statement of cash flows
B) income statement
C) statement of retained earnings
D) balance sheet