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Personal Finance Chapter 4 Essay

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Chapter 4
4.1 a. The difference between the income statement and balance is that the income sheet helps show any current value of the business. Balances are what reveal the company’s assets and liabilities. b. The statement is not providing explaining that the net income is the excess of the revenue over the expenses and the non-cash are being subtracted from the revenue itself.
4.3 a. Assets are valuable things that are owned by people or by a company itself. b.The three major categories of assets are stocks, bonds and cash equivalents.
4.5 a. The difference between long-term investments and property and equipment is that long-term investments are what show the company’s investments that can hold down more than a year. Property …show more content…

The difference between gross fixed assets and net fixed assets is that gross fixed assets are the amount of goods that is being owned by the business. Net fixed is purchasing all fixed assets like equipment. c. Depreciation is what shows the amount of expenses for the time being hinting that income on the statement would be shown. It will also show the date and from the time the assets were required at the end of the balance sheet.
4.7 a. The difference between equity section and an investor-owned business is that the not for profit business was formed to operate a profit organization. Investor owned business is providing services that are subject to government regulation. b. Net income is the income which shows the costs of goods being sold and the taxes during the accounting period. The equity section on a balance sheet shows the original income statements in which owners have come to prepare.
4.9 a. The statement of cash flows reports any cash generated and sees how the changes in the balance sheet occur. Income statement just reveals the profit and loss in the statement. b. The three major sections of the statement of cash flows are cash flows from the operating activities, financing, and the investing

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