Financial Modeling Refers to the Application of Spreadsheet Software to Define

question 40

True/False

Financial modeling refers to the application of spreadsheet software to define simple arithmetic relationships among variables within the firm's income, balance sheet, and cash-flow statements and to define the interrelationships among the various financial statements.

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Definitions:

Prior Period Adjustments

Prior period adjustments are corrections made to an entity's reported financial information to amend errors or omissions from previous reporting periods.

Income Tax Effects

The impact of tax policies and rates on the income of individuals and businesses, affecting net income and financial planning.

Statement of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specific period, including net income earned or loss and dividends paid.

Stockholders' Equity

Stockholders' Equity is the residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.