Ch 03: Assignment - Financial Statements, Cash Flow, and Taxes 1. Financial statements and reports What happened to assets, earnings, dividends, and cash flows during the financial year? Accounting practice in the United States follows the generally accepted accounting principles (GAAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversial issues. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information. A publicly held corporation must publish an annual report that contains the balance sheet, income statement, statement of cash flows, statement of stockholders' equity, and other financial information for analysis. The following table lists descriptions of the major financial statements and reports that a firm publishes. Identify the correct statement or report for each description. Statement or Report Description Provides details about the flow of funds from operating, Investing, and financing activities Gives details about the firm's sales, costs, and profits for the past accounting period. Details changes in the capital received from investors in exchange for stock (paid in capital), donated capital, and retained earnings. Is required by the SEC and includes the audited document that shows the company's financial results for the past year and management's discussion about the future outlook and plans. Summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time. s to evaluate Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance Indicate which financial statement you would refer to when answering the questions in the following table: Ch 03: Assignment Financial Statements, Cash Flow, and Taxes Statement or Report / / 11 Income statement Description Provides details about the flow of funds from operating, investing, and financing activities. Gives details about the firm's sales, costs, and profits for the past accounting period. Details changes in the capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. Is required by the SEC and includes the audited document that shows the company's financial results for the past year and management's discussion about the future outlook and plans. Summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time. Annual report Statement of cash flows Statement of stockholders' equity Balance sheet Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance Indicate which financial statement you would refer to when answering the questions in the following table: Balance Statement of Cash Sheet Does the firm generate enough internal funds to support anticipated investment, or does additional outside capital need to be raised? Can the firm meet all its short-term obligations using its current assets? The annual report is very important for investors, because the information contained in the annual report: O shows the prices at which each investor purchased the company's stocks and bonds. O helps investors forecast expected earnings and dividends. Ch 03: Assignment - Financial Statements, Cash Flow, and Taxes 1. Financial statements and reports What happened to assets, earnings, dividends, and cash flows during the financial year? Accounting practice in the United States follows the generally accepted accounting principles (GAAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversial issues. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information. A publicly held corporation must publish an annual report that contains the balance sheet, income statement, statement of cash flows, statement of stockholders' equity, and other financial information for analysis. The following table lists descriptions of the major financial statements and reports that a firm publishes. Identify the correct statement or report for each description. Statement or Report Description Provides details about the flow of funds from operating, Investing, and financing activities Gives details about the firm's sales, costs, and profits for the past accounting period. Details changes in the capital received from investors in exchange for stock (paid in capital), donated capital, and retained earnings. Is required by the SEC and includes the audited document that shows the company's financial results for the past year and management's discussion about the future outlook and plans. Summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time. s to evaluate Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance Indicate which financial statement you would refer to when answering the questions in the following table: Ch 03: Assignment Financial Statements, Cash Flow, and Taxes Statement or Report / / 11 Income statement Description Provides details about the flow of funds from operating, investing, and financing activities. Gives details about the firm's sales, costs, and profits for the past accounting period. Details changes in the capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. Is required by the SEC and includes the audited document that shows the company's financial results for the past year and management's discussion about the future outlook and plans. Summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time. Annual report Statement of cash flows Statement of stockholders' equity Balance sheet Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance Indicate which financial statement you would refer to when answering the questions in the following table: Balance Statement of Cash Sheet Does the firm generate enough internal funds to support anticipated investment, or does additional outside capital need to be raised? Can the firm meet all its short-term obligations using its current assets? The annual report is very important for investors, because the information contained in the annual report: O shows the prices at which each investor purchased the company's stocks and bonds. O helps investors forecast expected earnings and dividends