Analysis of the Financial Statement - Example Part 2 of 2

This video tutorial explains how to convert a chart of analysis into financial statements, covering the income statement, statement of retained earnings, balance sheet, and statement of cash flows. It details the components and calculations involved in each statement, including revenues, expenses, net income, assets, liabilities, equity, and cash flows. The tutorial emphasizes the importance of understanding these financial documents for effective financial analysis and decision-making.

What are the two main components of an income statement?

• Dividends and Retained Earnings

• Cash Flow and Equity

• Revenues and Expenses

• Assets and Liabilities

Which type of revenue is considered the main type for Alpha Company?

• Sales Revenue

• Interest Revenue

• Consulting Revenue

• Rent Revenue

What is the starting balance for retained earnings in a new business?

• The amount invested by the owner

• The total assets of the company

• The net income of the first year

• Zero

What is subtracted from the net income to calculate the ending retained earnings?

• Expenses

• Assets

• Liabilities

• Dividends

Which of the following is NOT a component of the balance sheet?

• Revenues

• Equity

• Assets

• Liabilities

What is the balance of cash as of the date on the balance sheet?

• 1440

• 8000

• 9840

• 5440

Which activity is NOT part of the statement of cash flows?

• Investing Activities

• Retained Earnings Activities

• Financing Activities

• Operating Activities

What is the net cash flow from financing activities?

• 5440

• 7800

• 360

• 2000

What should the ending cash balance in the statement of cash flows match?

• Total equity

• Total liabilities

• Net income

• Cash balance on the balance sheet

What is the purpose of the financial statements summary?

• To list all the expenses of the company

• To calculate the total assets

• To show the interconnections between different financial statements

• To provide a detailed analysis of each transaction