Discussion Questions Essay Example | Topics and Well Written Essays - 500 words

Discussion Questions - Essay Example In this way, firms of different sizes could be compared on an equal footing. For example, COGS of firm A may be greater than that of firm B. But its sales may be higher too. Q6. The dates on financial statements are important because they indicate the period in which profits or losses accrue and cash flows occur, as well as the financial status of the company as at a date. Q7. The income statement presents the incomes or revenues and expenses or costs of the firm incurred during a period, regardless of paid or not, to arrive at the profit or loss. On the other hand, the cash flow statement of the firm presents the revenues or costs received or paid during a period, regardless of incurred or not, to arrive at the cash outflow or cash inflow. The balance sheet captures the financial snapshot of the firm as at a particular point in time. The profit or loss on the income statement enters the retained earnings account, which is under shareholder's equity in the balance sheet. The cash inflow or cash outflow from the cash flow statement is added to or subtracted from the beginning cash balance to arrive at the ending cash balance, which is under current assets in the balance sheet. Q5.