Section 15.3

Which of the following is NOT a period over which financial statements are usually reported?

• Three months

• Half a year

• A full year

• Two weeks

What is the main reason managers use financial data?

• To determine fair increases in wages, salaries, and benefits

• To make day-to-day decisions

• To develop business laws and tax policies

• To decide on the terms of a loan to a business

According to the image, what do suppliers use financial reports for?

• To plan for the future

• To make day-to-day decisions

• To decide whether to extend credit to the business

• To determine fair increases in wages, salaries, and benefits

What is one of the uses of financial data by the government?

• To decide how much credit to extend

• To review past results

• To develop business laws and tax policies

• To decide to increase or decrease ownership investment

What is a balance sheet also known as?

• Statement of financial position

• Statement of financial stability

• Statement of financial status

• Statement of financial responsibility

What does a balance sheet report on a specific date?

• A business's assets, liabilities, and capital

• A business's marketing strategies

• A business's revenue and expenses

• A business's shareholders

What are liabilities?

• Claims against assets

• Investments in the business

• Financial advice

• Business profits

What is capital also known as?

• Net worth

• Net loss

• Gross profit

• Gross margin

How is capital (or stockholders' equity) calculated in a business?

• Adding liabilities to assets

• Subtracting assets from liabilities

• Subtracting liabilities from assets

• Multiplying assets by liabilities

What is the accounting equation?

• Assets = Liabilities - Capital

• Assets + Liabilities = Capital

• Assets = Liabilities + Capital

• Assets - Liabilities = Capital