1. What does the Foreign Corrupt Practices Act forbid U.S. companies to do?
Prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals.
2. What are two basic types of financial instruments?
Stocks and Bonds
3. What are secondary markets?
Secondary financial markets are where securities are traded after the initial offering.
4. What do cash flows from operating activities report?
Operating – day to day operations
, Investing – Property, plant, equipment, long term items
Financing – debt and equity changes
5. What does the statement of cash flows report?
Cash inflow and cash outflow of business for period of time
6. Write the equation that links the income statement to the balance sheet?
New Re= Old RE + Net Income – dividends
7.
Net income 2,000
Depreciation 500
Change in operating assets 400
Change in PPE 1,000
Change on long term liabilities 600
Dividends paid 100
What is the firm’s cash flow from financing activities? CFF
Increase in debt 600 + (no change in stock) 0 – (dividends paid) 100 = 500
8. Describe an income statement?
An income statement is a financial statement that shows you how profitable your business was over
a given reporting period. It shows your revenue, minus your expenses and losses
9. What item is included in the income statement and not included in the statement of
cash flows.
Depreciation
10. A company sold goods in 2016 for $30,000 and collected the cash in 2017. In 2016,
the company incurred and paid $20,000 in expenses related to the goods sold.
How much income should the company report in 2016 under the accrual basis of
accounting?
30,000-20,000= $10,000
11. 11.
EBIT: $1,000,000
Depreciation: $30,000
Changein working capital($5,000)
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