14.4.3. Financial Statements

Try these first

1. 1.

   What does the Income Statement show?

   Hint

   Look for terms related to revenue and expenses.

2. 2.

   Name one type of financial statement.

   Hint

   Think about reports that summarize financial information.

3. 3.

   What does the Income Statement summarize?

   • Assets and liabilities
   • Revenues and expenses
   • Cash inflows and outflows

   Hint

   Remember it deals with profits and losses.

4. 4.

   True or False: The Balance Sheet shows a company's cash flow.

   • True
   • False

   Hint

   Think about what components are included in the Balance Sheet.

5. 5.

   A company has sales of $200,000, expenses of$150,000, and depreciation of $20,000. Calculate the net profit for the Income Statement.

   Hint

   Make sure to account for all expenses.

6. 6.

   You are given a Balance Sheet that shows $100,000 in assets and$40,000 in liabilities. If company dividends of $10,000 are paid out, how does this affect the equity noted previously?

   Hint

   Consider how payments to shareholders influence total equity.