Business Review Lab Accounting

In: Business and Management

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In Part I, next to each item listed, you will identify which statement the item would appear. You will need to determine whether it would appear on the income statement (I), balance sheet (B), or statement of cash flows (CF). Then, for each group, explain the difference among the items listed. Finally, in Part II, discuss the relationship between the three financial statements.

Part I

Set 1:
____B_ Inventory, ending balance
___I__ Cost of goods (inventory) sold during the period
__B___ Cash paid to suppliers during the period
__B___ Accounts payable, ending balance
Accounts payable is purchases on credit, Inventory ending balance is amount of stock at end of year, cost of goods sold is an expense, cash paid to suppliers is cash flow

Set 2:
___B__ Accounts receivable, ending balance
___B__ Cash received from customers
____I_ Sales
Accounts receivable is money owed to a company by its debtors, cash received is cash flow

Set 3:
___I__ Wage expense for the period
__B__ Wages payable, ending balance
_B____ Cash paid for wages during the period
Wage expense is compensation earned by employees, wages payable is money not yet earned for work already completed.

Set 4:
___B__ Property, plant, and equipment, ending balance
__CF__ Cash paid for property, plant, and equipment during the period
___B__ Cash received from selling property, plant, and equipment during the period
____I_ Depreciation expense during the period (expense of using property, plant, and equipment during the period)
Difference: Property, plant and equipment are assets that depreciate; cash paid for property plant and equipment concerns the cash flow; cash received from selling property is cash flow; depreciation is an allocated and expected loss.
Set 5:
____B_ Notes payable, ending balance
____B_ Cash received from…...

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