Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 55

Following is a list of the key terms and concepts introduced in the chapter, along with a list of corresponding definitions. Match the appropriate letter for the key term or concept to each definition provided (items 1–15). Note that not all key terms and concepts will be used.

a. Accumulated depreciation	p. Earnings per share of common stock
b. Balance sheet	q. Paid-in capital
c. Accrued liabilities	r. Common stock
d. Current assets	s. Additional paid-in capital
e. Current liabilities	t. Retained earnings
f. Merchandise inventory	u. Dividends
g. Revenues	v. Par value
h. Expenses	w. Going concern concept
i. Gains	x. Matching concept
j. Losses	y. Accrual concept
k. Net sales	z. Opportunity cost
l. Cost of goods sold	aa. Annual report
m. Gross profit	bb. Income statement
n. Income from operations
o. Net income

_______ Cash and those assets likely to be converted to cash or used to benefit the entity within one year of the balance sheet date.

Step 1 of 3

Financial statements

These are the basic elements of financial reporting. These are the set of books that a company maintains in order to record its financial transactions. The financial statements when complete at the end of the period include the below-mentioned elements.

1. Statement of Income

2. Balance Sheet

3. Statement showing changes in equity of the shareholders.

4. Cash Flow Statement

Financial statements are an important part of any business as the financial soundness can only be judged by the financial statement. This is an integral part as without the same it is difficult to estimate revenue, sales, cost, and depreciation.