Question 1. What is the relationship of liabilities and stockholder's equity, and why is it so?
What is the purpose of the income statement and the balance sheet? How are the two related? (these two items count as one question)
Question 2. When you contrast the liability of the balance sheet for a manufacturing firm to that of financial services company, why would you expect to see a significant difference in the liquidity of the liabilities?
Question 3. In analyzing the financial statements of a global organization, contrast the difference between shareholders and creditors in the U.S. and other countries.
Question 4. What is the danger of making direct charges to shareholders' equity without running them through the income statement?
Question 5. How would differences in managing inventories, cash balances, and accounts receivables impact the relationship between current assets and non-current assets (long-lived/investments), and current assets and liabilities? (Consider just-in-time, swept balances, and securitization of accounts receivables.)
Question 6. How is the use of accelerated depreciation related to the timing of profits and tax liabilities?