Chapter 14 SmartBook

A summary of all the financial transactions that have occurred over a particular period is referred to as a ______. annual report tax return journal entry financial statement

financial statement

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 management finance investing

accounting

What term describes the cost of merchandise the firm sells? cost of goods sold cost of goods relinquished cost of goods produced cost of goods returned

cost of goods sold

A tax accountant has specialized and learned tax ____ and is responsible for preparing tax returns.

law(s) or legislation

What is an annual report? A specialized record book or computer program that contains summaries of all journal entries A yearly statement of a firm's financial condition, progress and expectations The recording or entry of debt in an account A record book or part of a computer program containing the daily record of a firm's transactions

A yearly statement of a firm's financial condition, progress and expectations

_______ 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

What are the major categories on the balance sheet? (Select all that apply) cash balance assets liabilities retained earnings owners' equity

assets liabilities owners' equity

Which three components make up the fundamental accounting equation? owners' equity liabilities income expenses assets

owners' equity liabilities assets

Financial accounting and managerial accounting differ in terms of who uses the information. Financial accounting provides information primarily for ______. people inside the organization people outside the organization the government managerial accountants

people outside the organization

In using the accounting equation, if assets = $40,000 and liabilities = $30,000, then owner's equity is equal to ______. $70,000 $80,000 $10,000 $20,000

$10,000

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

accounting

The information and analysis that comes from managerial accounting is used to ______. prepare tax returns and financial statements required by the IRS audit the firm's business activities and verify the accuracy of financial statements assist managers inside the organization with their decision making provide information to potential investors of the firm

assist managers inside the organization with their decision making

In operating a business, rent, salaries, supplies, utilities and insurance are all examples of ______. revenue accounts liabilities assets operating expenses

operating expenses

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

operations

The first step in the accounting cycle is to ______. perform an internal audit record transactions in journals take a trial balance analyze source documents

analyze source documents

Which of the following are considered disciplines within the accounting profession? (Select all that apply) investment accounting financial accounting managerial accounting tax accounting

financial accounting managerial accounting tax accounting

Because they indicate a firm's financial health and stability, the use of ______ are key factors in management decision making. annual reports tax returns ledger entries financial statements

financial statements

In the accounting equation, what is the term for the difference between assets and liabilities? income debt owners' equity retained earnings

owners' equity

The major categories of the balance sheet are assets, liabilities, and ______. owners' equity profit retained earnings income

owners' equity

Managerial accounting is used to provide information to ______. those inside the firm those both inside and outside the firm those outside the firm governmental agencies only

those inside the firm

If financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable? lending institutions operations accounting information financial software

accounting information

The _______ line is another name for net income after taxes.

bottom

What are some benefits of using computers for accounting purposes? (Check all that apply) It frees accountants' time for more important tasks. Software can help if no strong accounting personnel is available. Information can be posted from journals instantaneously. They can make good financial decisions automatically.

It frees accountants' time for more important tasks. Software can help if no strong accounting personnel is available. Information can be posted from journals instantaneously.

______ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm. Revenue Sales Interest Rent

Revenue

How do cash flow problems usually start? The firm issues stock. The firm uses improper ratio analysis. The firm has an initial public offering. The firm uses up its credit.

The firm uses up its credit.

The income statement shows ______. the basic accounting equation a firm's profit after costs, expenses, and taxes a firm's assets, liabilities, and stockholders equity inflows and outflows of cash

a firm's assets, liabilities, and stockholders equity

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 ______. budgets annual report financial transactions tax returns

annual report

Reviewing and evaluating records used to prepare a company's financial statements is referred to as ______. accounting bookkeeping reporting auditing

auditing

_________ accounting generates financial information for people outside the firm, while ________ accounting generates financial information for people inside the firm.

financial; managerial

What type of accountant is most likely to develop strategies for a firm in dealing with the Internal Revenue Service? management accountant certified internal auditor tax accountant private accountant

tax accountant

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

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

Stockholders', or owners' equity represents ______. the value of the corporate stock on the market the amount the owners owe in debt the total value of what a business owns the value of the business that belongs to owners

the value of the business that belongs to owners

A journal is the place where: transactions are changed a trial balance is kept transactions are first recorded financial statements are prepared

transactions are first recorded

What is considered to be the "language of business"? operations accounting finance investing

accounting

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

classifying financial transactions recording financial transactions interpreting financial transactions

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 a trial balance double-entry accounting the accounting cycle

computerized accounting programs

An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______. the accounting cycle a trial balance computerized accounting programs double-entry accounting

computerized accounting programs

Which of the following has the highest liquidity? intangible assets fixed assets property current assets

current assets

In accounting, liabilities refer to ______. debts a business owes to others the economic resources of a firm the different forms of revenue a firm generates cash transactions associated with running a business

debts a business owes to others

Where is accounting data first entered? in a ledger on an accounting record in a journal on a balance sheet

in a journal

The ________ statement summarizes revenues, costs, and expenses over a specific period, which may be a week, a month, or a year.

income

What is another name for debts? equity liquidity assets liabilities

liabilities

The ease with which an asset can be converted to cash is called ______. conversion solvency depreciation liquidity

liquidity

The "bottom line" is: the last line on the balance sheet the last line on the statement of cash flows net income or loss after taxes the last line on the income statement

net income or loss after taxes the last line on the income statement

The formula for the costs of goods sold is _____. purchase price + freight charges + storage costs purchase price + returns - allowances purchase price + freight charges + taxes purchase price -returns-freight and storage charges

purchase price + freight charges + storage costs

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

ratepayers taxpayers

What is the term for the monetary value of all resources that come into the firm from operating activities? profit gross sales net sales revenue

revenue

The role of an auditor is to ______. invest corporate money into the stock market review and evaluate a company's financial information record daily financial transactions prepare individual and corporate tax returns

review and evaluate a company's financial information

Cash flow analysis is especially important for which of the following? small businesses the federal government large businesses the state government

small businesses

Cash receipts and disbursements related to operations, investments, and financing are reported on the ______. income statement statement of cash flows balance sheet ledger

statement of cash flows

Operating expenses include which of the following? utilities rent supplies capital improvements

utilities rent supplies