Ent 202 final exam
________ measures the extent to which a business can meet its obligations for the long haul.
Debt-to-equity ratio
________ ratios measure the business's ability to pay debts and expenses that are due in the current accounting period.
Liquidity
Which of the following is a drawback to financing with debt?
Payment is expected even if you have no money to make the payment.
________ refers to amounts that are owed to a business for merchandise that was sold on credit.
Receivables
Which of the following is the cost incurred in financing, insuring, taxing, or tracking an asset?
cost of owning
________ refers to a set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.
internal control
The term ________ is associated with objectively evaluating how well someone is doing their job.
job metrics
The practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer is termed as
just-in-time inventory.
________ refers to the concept that key employees should be able to see and understand a firm's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the strategy and success of the firm.
open-book policy
________ is a formal, rule-based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators.
Financial accounting
The emphasis of financial management during the ________ phase is to obtain increasing amounts of cash inflows to pay for added inventory, productive assets, and employees.
Growth
Which of the following statements is not true of using insurance to manage business risk?
It is possible to use insurance to avoid all types of business risk.
At the ________ stage of a business, the emphasis of financial management is to build owner wealth, to conserve assets, to match cash inflows to outflows, and to maximize the return on capital assets by making optimal investing decisions.
Operations
Properly prepared financial statements agree such that the cash flow statement provides the ending cash balance for the
balance sheet
As a business owner, if you have a group of people you assemble because you trust their judgment and goodwill toward you and your firm who may meet with you as a group, or individually for impromptu meetings are considered your
board of advisors
A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave.
cash budget
Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called
cash flow from operations.
During the start-up phase of a business, the emphasis is on
conserving what little cash the business has.
This ratio is determined by dividing current assets by current liabilities.
current ratio
To protect your business from having cash drained by employees, you first must hire honest and ethical people, and secondly,
develop and enforce effective internal control over who may handle cash and who may account for cash.
Making ________ work requires giving employees permission to act, the knowledge to act, and the skill to act.
empowerment
Which of the following answer options is not one of the most commonly identified sources of U.S. business risk small businesses face?
government instability
A(n) ________ is a valuable process that can greatly help an employer with the issues of keeping risks at acceptable levels. It is strictly a management tool that is not provided to outsiders; it can be structured and conducted in any systematic manner the owner finds acceptable.
internal audit
A(n) ________ defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position.
job description
In the accounting equation, assets equal
liabilities plus owner's equity.
An accounting method that is specifically intended to be used for planning, directing, and controlling a business is called
managerial accounting
Amounts owed to vendors for merchandise or services purchased on credit are called
payables
The amount of time it takes a business to earn back the funds it paid out to obtain a capital asset is referred to as the
payback period
________ refers to a type of periodic inventory that conducts a count of the entire inventory being held for sale at a specific point in time.
physical inventory
Giving a third party legal rights to debts owed by the business in order to provide assurance that borrowed money will be repaid is called
pledging receivables
________ is an accounting approach based on specific accounting requirements set by governmental taxing agencies.
tax accounting
One of the first steps in developing a compensation plan is
to determine whether hiring is to be done for an hourly or salaried position.
The first task to be completed before a comprehensive insurance program for a business can be developed is
to identify risks