1. Identify one account that would typically be found on a balance sheet, and one account that would typically be found on an income statement, and define them. Cite any references
2. Choose one of the assumptions, principles, constraints, primary characteristics, secondary characteristics, or elements of accounting as found in the conceptual framework of accounting. Explain the concept in your own words and describe a business situation in which the concept could be applied.
3. What information might you use, besides the financial statements of an organization, when analyzing its financial health? Be specific, and identify the usefulness of the information that you identify.
4. In performing a horizontal analysis on a company’s income statement, you notice that sales have decreased by 4%, but the gross profit has increased by 10%. What are some factors that could cause this to happen?
5. What are the benefits of ratio analysis? What are the limitations of ratio analysis? What can be done to minimize the limitations on ratio analysis? Explain.
6. What are the differences between the indirect and direct methods of preparing the statement of cash flows? Do you agree with the FASB that the direct method is preferred? Why, or why not?
7.Choose a publicly traded company and calculate its cash flow ratios. Demonstrate your calculations in your post, and explain what the cash flow ratios indicate about the company.
8. Distinguish between a variable cost, a fixed cost, and a mixed cost. Identify a publicly traded, well-known company, and identify what you envision would be a variable cost, a fixed cost, and a mixed cost for this company.
9. What is meant by a product’s contribution margin ratio? How is this ratio useful in planning business operations?
10. What other ways, besides relevant costs, could be used to analyze a make-or-buy decision?