BA 101 Ch 17 Textbook

x ratios tell us how effectively management is turning over inventory.

Activity Rratios

Leverage or debt ratios measure the degree to which a firm relies on ______.

Borrowed funds

What is considered to be the "language of business"?

Accounting

The ratios that measure the effectiveness of a firm's management in turning over inventory are called ______. Multiple choice question. activity ratios liquidity ratios quick ratios leverage ratios

Activity Ratio

Which are considered to be the working areas of accounting? (Select all that apply) tax accounting managerial accounting auditing financial accounting government and not-for-profit accounting bank accounting

tax accounting managerial accounting auditing financial accounting government and not-for-profit accounting

x ratios measure the degree to which a firm relies on borrowed funds in its operations.

Debt Ratios

What is the term for all resources that come into the firm from operating activities?

Revenue

__ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm.

Revenue

Cash flow analysis is especially important for which of the following?

Small Business

An advantage of the use of computers to maintain and compile accounting information is ______.

Speed

The key working areas of accounting include managerial accounting, financial accounting, tax accounting, government and nonprofit accounting, and x.

auditing

What are the three major categories on the balance sheet? Multiple select question. liabilities cash balance retained earnings assets owners' equity

- Assets - Liabilities - Owners' equity

On a balance sheet, assets may include ______. (Select all that apply) Multiple select question. tangible resources retained earnings intangible resources bonds payable goodwill

- Tangible Resources - Intangible Resources - Goodwill

In operating a business, rent, salaries, supplies, utilities and insurance are all examples of ______.

operating expenses

Rent, salaries, supplies, utilities, and insurance are examples of x expenses that are general expenses.

operating expenses

An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______.

computerized accounting programs

What term describes the cost of merchandise the firm sells?

cost of goods sold

The role of an auditor is to ______.

review and evaluate a company's financial information

Which three components make up the fundamental accounting equation?

Liabilities, assets, owners' equity

Net income is ______.

all revenue minus all expenses and taxes

In accounting, liabilities refer to ______.

debts a business owes to others

Which three activities are part of the function of accounting? planning financial transactions classifying financial transactions prioritizing financial transactions recording financial transactions interpreting financial transactions

- classifying financial transactions - recording financial transactions - interpreting financial transactions

Which are steps in the accounting cycle? (Select all that apply) build a budget prepare a trial balance analyze transactions determine investment opportunities record transaction in the journal

- prepare a trial balance - analyze transactions - record transaction in the journal

The relationship among assets, liabilities, and owners' equity is a fundamental concept in accounting known as the _______ equation.

Accounting

Stakeholders who want to look at detailed financial information on whether a company is profitable, is able to pay its bills, and how much debt it owes will look at the firm's ______.

Annual Report

The is the yearly statement of the firm's financial condition, progress, and expectations provided to stakeholders.

Annual Report

x are economic resources owned by a firm.

Assets

Reviewing and evaluating of records used to prepare a company's financial statements is referred to as x

Auditing

It's possible for a business to increase its sales and profits yet still suffer x flow problems.

Cash flow

Because they indicate a firm's financial health and stability, the use of ______ are key factors in management decision making.

Financial Statement

The best way to understand a firm's financial health and stability is to look at its ______.

Financial Statement

An indirect measure of risk that tells us how much a firm earned for each dollar invested by its owners is called ______.

Return on equity

The current ratio is an example of a(n) x ratio that measures a company's ability to turn assets into cash to pay its short-term debts.

Liquidity ratio

x income after taxes is the last line on the income statement.

Net Income

The major categories of the balance sheet are assets, liabilities, and ______.

Owners' equity

Calculating and interpreting financial ratios developed from the firm's financial statements is called:

Ratio Analysis

The first step in the accounting cycle is to ______.

analyze source documents

The information and analysis that comes from managerial accounting is used to ______.

assist managers inside the organization with their decision making

The statement of cash flows is a financial statement that shows ______.

cash receipts and disbursements

Return on x is net income after taxes divided by total owners' equity.

equity

Return on equity is net income minus taxes divided by ______.

total owners' equity

If financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable?

Accounting Information

A x accountant is trained in tax law and is responsible for preparing tax returns.

Tax

How do cash flow problems usually start?

The firm uses up its credit.

Through the recording, classifying, summarizing, and interpretation of financial events in an organization, the function of ______ helps managers make good decisions about the firm's operations.

Accounting

Since converting the firm's inventory to profits is a key function of management, firms use ______ to measure the effectiveness of management in utilizing the assets that are available.

Activity Ratios

What are four main types of financial ratios used in ratio analysis? Multiple select question. Activity ratios Income ratios Debt ratios Profitability ratios Tax ratios

Activity ratios Debt ratios Profitability ratios Liquidity ratios

x and nonprofit accounting supports organizations whose purpose is not generating a profit, but serving ratepayers, taxpayers, and others according to a duly approved budget.

Government

Which financial statement shows a firm's bottom line—its profit (or loss) after costs, expenses, and taxes for a specific period?

Income Statement

Managerial accounting is used to provide information ______.

Inside the firm

The debt a firm owes to others is called a(n) ______.

Liability

x ratios measure a company's ability to turn assets into cash to pay its short-term debt.

Liquidity

The x of x x measures the cost of merchandise the firm sells or the materials and supplies used to manufacture them for sale.

The cost of Goods Sold

The income statement shows ______.

a firm's profit (or loss) after costs, expenses, and taxes

The statement of cash flows reports cash receipts and disbursements related to x, investments, and financing.

operations

The formula for the costs of goods sold is ______.

purchase price + freight charges + storage costs

A x accountant is trained in tax law and is responsible for preparing tax returns or developing tax strategies.

tax accountant

Government and nonprofit accounting involves working for organizations whose purpose is to serve ______. (Select all that apply) taxpayers ratepayers partners stockholders

taxpayers ratepayers