the lettered terms to the blanks below to complete the relevant formula for each financial statement. A. Cash at beginning of year B. Net cash flow from operating activities C. Balance of retained earnings from previous year D. Net cash flow from investing activities E. Liabilities F. Net cash flow from financing activities G. Balance of retained earnings at end of year H. Net income I. Revenue J. Assets K. Stockholders' equity L. Expenses M. Cash at end of year N. Dividends paid A letter may be used more than once. Use the blank on the left side of the equal sign for the "bottom line" number that is reported at the end of each financial statement. Rearrange the formula if necessary.
Liabilities at the end of the year are equal to liabilities at the beginning of the year plus (minus) changes to liabilities during the year. Liabilities at the beginning of the year were $30,000 and the change in liabilities during the year was an increase of $3,000 because the expenses incurred were unpaid as of the end of the year. AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements. Topic: Balance Sheet 88. The amount of assets at the end of the year is Assets at the end of the year are equal to assets at the beginning of the year plus (minus) changes in assets during the year. Assets at the beginning of the year are $100,000 and assets increased during the year by $5,000 (revenues paid in cash) and decreased by $1,000 (dividends paid in cash). AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements. Topic: Balance Sheet 89. Which of the following would not be reported on the Balance Sheet for a company? The Balance Sheet contains Assets (Accounts receivable and Cash), Liabilities (Accounts payable) and Stockholders' equity. Advertising expense is an expense reported on the Income Statement, not the Balance Sheet.
The change in assets must equal the sum of the changes in liabilities and stockholders' equity. The increase in Assets of $55,000 must equal the sum of the increase in stockholders' equity of $20,000 plus the increase in liabilities of $35,000. AACSB: Analytic AICPA BB: Resource Management AICPA FN: Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements. Topic: Accounting Equation 93. For the current year, the first year of operations, a company sold $100,000 of goods to customers and received $90,000 in cash from customers. The remainder is owed to the company at the end of the year. The company incurred $70,000 in expenses for the year and paid $65,000 of these in cash. The remainder is owed by the company at the end of the year. Based on this information, what is the amount of net income for the year? Revenue is reported on the income statement when it is earned and expenses are reported when they are incurred. Net Income = Revenue $100,000 - Expenses $70,000 = $30,000. AACSB: Analytic AICPA BB: Resource Management AICPA FN: Reporting Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements. Topic: Income Statement 94. Which of the following items appear on more than one financial statement? Ending cash appears on the balance and the cash flow statement. Ending retained earnings appears on the balance sheet and the retained earnings statement.