C213 Final Exam Study Questions With 100% Correct Answers | Verified

Describe the three financial statements. {Ans: The balance sheet reports a company's assets, liabilities, and owners' equity. It reports the financial position of a firm at a point in time. The income statement reports the amount of net income earned by a company during a period. Net income is the excess of a company's revenues over its expenses. It reports the financial performance of a firm over a period of time. The statement of cash flows reports the amount of cash collected and paid out by a company in the following three types of activities: operating, investing, and financing over a period of time.}Describe the purpose of management accounting. {Ans: main purpose is to provide a firm's management with information they can use to run the business more efficiently and effectively. However, managers also use financial accounting reports to accomplish these goals as well.}Describe cost-volume-profit analysis. {Ans: a technique for determining how changes in revenues, costs, and level of activity affect the profitability of an organization.}Investors {Ans: Investors want information to help them estimate how much cash they can expect to directly receive from the business in the future if they invest in it now.}CPA Accreditation