Page 420 - Business Principles and Management

Chapter 15 • Business Financial Records

Businesses must keep a variety
of financial records, budgets,
and statements. What kinds
of personal financial records
do you keep?

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15.3 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Determine the best answer for each of the following questions.
1. The basic accounting equation is
a. income expenses profit or loss
b. liabilities assets capital
c. assets liabilities capital
d. income profit or loss expenses
2. The information from the income statement needed to calculate
gross profit does not include
a. revenue
b. cost of goods sold
c. operating expenses
d. All are needed to calculate gross profit.

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Why is the balance sheet an important financial statement for
potential investors in a company to review?
4. Why is it important to study a company’s financial performance
over a period of time and its financial condition
on a specific date?

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