Evaluate Business Performance

Front 1

The financial statements must be prepared in the following order:

Back 1

income statement, statement of owner’s equity, balance sheet, and statement of cash flows.

Front 2

Net income (or net loss) is reported on the

Back 2

income statement.

Front 3

Report ______ if revenues exceed expenses. Report _____ if expenses exceed revenues.

Back 3

a net income
a net loss

Front 4

a.Expenses are listed in ______ order.

Back 4

decreasing

Front 5

a.The formula for net income is:

Back 5

Revenues - Expenses = Net income

Front 6

1.The statement of owner’s equity appears in the following format:

Back 6

Owner’s capital, beginning of the period
Add: Investments by owner
Net income (loss)
Less: Withdrawals by owner
Owner’s capital, end of period

Front 7

The balance sheet reports

Back 7

assets, liabilities, and owner’s equity as of the end of the period.

Front 8

The balance sheet must _______. The sum of the assets must equal _______________________________.

Back 8

balance.
the sum of the liabilities plus owner’s equity.

Front 9

The owner’s ending capital is taken directly from

Back 9

the statement of owner’s equity.

Front 10

1The statement of cash flows reports cash flows from three types of activities (___,___,____) during the period. Each category includes both ___ and ___ (negative amounts denoted by parentheses).

Back 10

operating, investing, and financing activities.
cash receipts and cash payments.