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How to Measure Investment Returns

In: Business and Management

Submitted By triggagman78
Words 295
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DSVsv bDDF| Question : | (TCO 1) The Accounting Equation is used to develop the organization's financial reports. (1) Describe what assets value would be if Liabilities are $12,000 and Owners' Equity is $50,000 by showing the Accounting Equation (10 points), and (2) provide an example of two asset accounts that could contain the value. (10 points) |
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| Student Answer: | | 1.Assets=Liabilities+Owners Equity 12,000+50000 Assets=62,000 2.Cash and Equipment | | Instructor Explanation: | Textbook pages 11-12. Assets = $12,000 + $50,000 = $62,000. Cash and inventory are examples. |
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Question 2. | Question : | (TCO 1) The financial statements present a company to the public in financial terms. (1) Which financial statement should be prepared first and why (10 points), and (2) explain what information this financial statement provides. (10 points) |
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| Student Answer: | | the four basic financial statements are the income statement, statement of owner's equity, statement of cash flows which reports activity for a specific period of time usually a month, quarter or year and the balance sheet which reports balances of certain elements at a specific time. the income statement should be prepared first, it lists revenues and expenses and calculates the company's net income or net losss for a period of time. it lists all the expenses and losses on the debit side and all the income and gains on the creidt side. 2. a financial report indicates sources and amounts of revenues, amount of expenses accounts and profit or loss. generally prepared on either an accrual or cash basis | | Instructor Explanation: | Textbook pages 15-21. Income Statement. Compares revenue to expenses. |
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Question 3. | Question : | (TCO 1) The

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