The Financial Statements! Ultimate Trivia Quiz

The correct answer is Assets = Liabilities + Shareholder's Equity. This equation represents the fundamental accounting principle that states that a company's total assets must be equal to the sum of its liabilities and shareholder's equity. Assets are the resources owned by the company, liabilities are the company's debts or obligations, and shareholder's equity represents the owners' claim on the company's assets. By maintaining this equation, a company ensures that its financial statements accurately reflect its financial position.

COGS stands for Cost of Goods Sold. This term refers to the direct costs incurred in producing or acquiring the goods that a company sells. It includes the cost of raw materials, labor, and any other expenses directly related to the production or acquisition of goods. By calculating the COGS, a company can determine the cost of producing each unit of goods sold and analyze its profitability.

The statement of cash flows is a financial statement that shows the sources and uses of cash in a company during a specific period. It includes cash receipts, which are inflows of cash from various activities such as sales, investments, or borrowing, and cash purchases, which are outflows of cash for expenses, investments, or debt repayments. Therefore, the given statement that the statement of cash flows includes cash receipts and cash purchases is true.

The correct answer is "All of the above." LTB, which stands for Long-Term Borrowing, will affect all three financial statements: the Income Statement, Balance Sheet, and Cash Flow. Long-term borrowing involves obtaining funds that are expected to be paid back over a period of more than one year. This will impact the Income Statement as it will include interest expense related to the borrowing. It will also affect the Balance Sheet by increasing liabilities and potentially impacting the company's debt-to-equity ratio. Lastly, it will impact the Cash Flow statement as it will involve cash inflows from the borrowing and cash outflows from the repayment of the loan.

The given statement is true. Shipped COGS (Cost of Goods Sold) represents the cost of producing and delivering goods to customers. Adjustments/Other Std Costs refer to any additional costs or adjustments made to the standard costs. Standard Costs are the predetermined costs that a company expects to incur for producing a product or providing a service. Therefore, the equation "Shipped COGS + Adjustments/Other Std Costs = Standard Costs" is accurate.

Depreciation is a non-cash expense that represents the decrease in value of an asset over time. It is deducted from the value of the asset on the balance sheet, but it does not involve any actual cash outflow. Therefore, depreciation does not affect the cash flow of a company and will not show up on the Cash Flow Statement.

Bookings are not recorded on the Income Statement. The Income Statement, also known as the Profit and Loss Statement, shows the revenues, expenses, and net income or loss of a company over a specific period. Bookings, on the other hand, refer to the number of reservations or orders received by a company. While bookings may be an important metric for tracking sales activity, they are not directly recorded as revenue on the Income Statement. Instead, revenue is recognized when the goods or services are delivered or rendered to the customer. Therefore, the statement "Bookings are recorded on the Income Statement" is false.

The correct answer is the expense associated with negotiated cost savings with suppliers as well as revaluation of inventory. This means that when a company negotiates lower costs with its suppliers or revalues its inventory, it incurs expenses related to these activities. These expenses can include any additional costs incurred during the negotiation process or any adjustments made to the value of the inventory based on market conditions.

Non Material Spend refers to costs that are not directly related to a PID (Product Identification). These costs are not associated with the physical materials used in the manufacturing process. Examples of non material spend could include expenses related to marketing, advertising, research and development, administrative costs, or overhead costs. These costs are necessary for the overall operation of the business but do not directly contribute to the production of a specific product.

The Last Time Buy (LTB) process, which involves purchasing End-of-Life (EOL) components from suppliers, was instituted in March 2007.