Flashcards on Introduction to Financial Statements

Introduction to Financial Statements: A Student's Guide

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What are the three main financial statements?

Income Statement, Balance Sheet, Cash Flow Statement.

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Financial Statements

11 cards

Card 1

Question: What are the three main financial statements?

Answer: Income Statement, Balance Sheet, Cash Flow Statement.

Card 2

Question: What does the Income Statement show?

Answer: Profitability.

Card 3

Question: List the typical line items found on an Income Statement from the content.

Answer: Revenue; Cost of sales; Gross profit; Operating expenses; Depreciation; Interest expense; Tax; Net profit.

Card 4

Question: What does the Balance Sheet show?

Answer: What the farmer (or company) owns and owes.

Card 5

Question: Name asset items listed on the Balance Sheet in the content.

Answer: Land; Machinery; Licensure; Inventory; Cash; Accounts receivable.

Card 6

Question: Name liability and equity items listed on the Balance Sheet in the content.

Answer: Liabilities: Loans; Accounts payable. Equity: Owned capital; Retained earnings; Shared capital.

Card 7

Question: What are the three sections of the Cash Flow Statement?

Answer: Operating activities; Investing activities; Financing activities.

Card 8

Question: When you buy a tractor for cash, how does the Balance Sheet change?

Answer: Machinery increases; Cash decreases.

Card 9

Question: When you buy a tractor for cash, how does the Income Statement change immediately?

Answer: No immediate expenses except future depreciation.

Card 10

Question: When you buy a tractor for cash, how does the Cash Flow Statement change?

Answer: Shows an investing outflow.