Deck 12: An Even Closer Look at Financial Statements

Question 1

Put the following assets in order of liquidity: accounts receivable, inventory, cash, marketable securities.

Answer 1

1. Cash 2. marketable securities 3. accounts receivable 4. inventory

Question 2

Describe the difference between the Excess of Revenues over Expenses and the Increase in Net Assets without Donor Restrictions.

Answer 2

The Excess of Revenues over Expenses focuses on operating activities, while the Increase in Net Assets without Donor Restrictions includes non-operating changes to owners' equity.

Question 3

In a not-for-profit organization, donations received for a particular purpose are recorded as Net Assets _1.__. Donations that are cannot be spent, but the earnings can be are referred to as Net Assets _1.__. Profits and donations with no donor specifications are referred to as Net Assets ______2__.

Answer 3

1. With Donor Restrictions; 2. Without Donor Restrictions

Question 4

Match the following terms with the appropriate definitions.

-__ Common stock

A) Ownership rights with predetermined dividend payments.
B) Sale of ownership shares to generate capital.
C) Profits generated over time that have not been distributed to owners.

Question 5

Match the following terms with the appropriate definitions.

-__ Preferred stock

A) Ownership rights with predetermined dividend payments.
B) Sale of ownership shares to generate capital.
C) Profits generated over time that have not been distributed to owners.

Question 6

Match the following terms with the appropriate definitions.

-__ Retained earnings

A) Ownership rights with predetermined dividend payments.
B) Sale of ownership shares to generate capital.
C) Profits generated over time that have not been distributed to owners.