A balance sheet provides a snapshot of a business's assets, liabilities, and equity at a specific point in time
What does an income statement show over a period of time?
Revenue, expenses, profit/loss
Match the financial statement with its purpose:
Balance Sheet ↔️ Shows financial position at a point in time
Income Statement ↔️ Measures financial performance over a period
Cash Flow Statement ↔️ Tracks cash movements over a period
The income statement measures a business's financial performance over a period of time.
What is the owner's stake in a business referred to in a balance sheet?
Equity
What are two key purposes of the income statement?
Measure profitability and show revenue sources
The income statement provides insights into the financial activities and results
The balance sheet provides a snapshot of assets, liabilities, and equity
Match the financial statement with its use:
1️⃣ Balance Sheet
2️⃣ Financial position at a point in time
3️⃣ Income Statement
4️⃣ Revenue, expenses, profit/loss
What does the income statement measure?
Financial performance
The income statement shows a business's revenue, expenses, and profit/loss during a specific period
Match the financial statement with its purpose:
Income Statement ↔️ Measures financial performance
Balance Sheet ↔️ Indicates financial position
Order the three main financial statements based on their focus:
1️⃣ Balance Sheet: Financial position at a point in time
2️⃣ Income Statement: Financial performance over a period
3️⃣ Cash Flow Statement: Dynamic view of cash movements
Stakeholders use financial statements to evaluate the profitability and solvency of a business.
True
What is the purpose of a balance sheet?
Indicates financial position
Financial statements are used by both internal stakeholders like managers and external stakeholders like investors to analyze the financial health and performance
What are the three main components of a balance sheet?
Assets, liabilities, equity
The balance sheet is used to measure the financial performance of a business over time.
False
Stakeholders use the balance sheet to assess the financial stability and solvency of a business.
True
What is the key purpose of the income statement?
Measure the profitability
The income statement shows what the business owns and owes.
False
Financial statements are used by both internal and external stakeholders.
True
The balance sheet shows a business's financial position at a specific point in time.
True
The income statement measures a business's financial performance over a period of time
The cash flow statement tracks the cash inflows and cash outflows of a business over a period of time
The cash flow statement assesses both liquidity and solvency of a business.
True
Analyzing financial statements provides insights into the overall financial health and viability of the business.viability
What are the two main financial statements used to summarize a business's financial activities and position?
Balance sheet and income statement
The balance sheet measures financial performance over a period of time.
False
What are the three key financial statements used in business studies?
Balance Sheet, Income Statement, Cash Flow Statement
Assets are resources owned by the business
What does the balance sheet show about a business's financial position?
Assets, liabilities, equity
Which financial statement tracks the cash inflows and outflows from operations, investing, and financing activities?
Cash Flow Statement
The income statement measures a business's financial performance over a period of time.
The income statement measures financial performance over a period of time, such as a year or quarter.
True
What are the two main financial statements?
Balance sheet and income statement
What are the three key financial statements?
Balance sheet, income statement, cash flow statement
Liabilities are obligations owed to others
The balance sheet shows financial position at a point in time, while the income statement provides insights into financial activities over a period.
True
The balance sheet defines a snapshot of assets, liabilities, and equity, while the income statement measures revenue, expenses, and profit/loss.