BUS 100 financial reports and accounting

Current assets, such as marketable securities and inventory, usually are expected to be turned into cash within

1 year

_____ ratios reflect the speed with which resources are converted to cash or sales.

Activity

The ratio of current assets to current liabilities is called the ownership ratio

This is the quick or acid-test ratio

An accounting system should generate both internal and external reports

True

Managerial accounting provides information that would probably be most beneficial to

a middle manager of the company (for internal use)

Amounts owed to the firm by customers who bought goods and services on credit are called:

accounts receivable

There are two types of expenses recorded on the income statement. They are

cost of goods sold and operating expenses

_____ are debts that are to be paid within twelve months.

current liabilities

Profitability ratios are used to

determine how efficiently a company is being managed

The ratio of net profit to the number of shares of common stock outstanding is called the:

earnings per share

The difference between net sales and cost of goods sold is

gross profit

Managerial accounting provides all of the following financial information EXCEPT

income statements

Why do U.S. accountants follow generally accepted accounting principles (GAAP)?

to ensure accuracy and consistency in the way financial information is reported

In the accounting field, CMA stands for:

Certified Managerial Accountant

_____ ratios measure the degree and effect of the firm's use of borrowed funds to finance its operations.

Debt

_____ is the company's ability to expense fixed assets over their useful life

Depreciation

An example of an intangible asset is accounts receivable because the firm does not see or feel it until it is paid in full

F

_____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm

Financial accounting; Managerial accounting

_____ are those expenses related to marketing and distributing of a company's products

Selling expenses

All publicly held companies must include a statement of cash flows in their financial reports to stockholders

T

An accounting system should generate both internal and external reports

T

Independent accountants who serve organizations and individuals on a fee basis are called public accountants

T

For which of the following assets would a wholesale company use depreciation?

its warehouses Depreciation is the process of distributing the original cost of a long-term asset over the years of its useful life.

After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the _____ when it is a positive number

net profit

Accountants employed within organizations are called

private accountants

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team intangible asset(Goodwill)