GTB Test #2

Gross Sales vs. Net Sales

Gross sales are the grand total of all sale transactions reported in a period, without any deductions included within the figure. Net sales are defined as gross sales minus the following three deductions: Sales allowances. A reduction in the price paid by a customer, due to minor product defects

M1 VS M2

M1: includes moneys that can be spent imediately and against which chekcs can be written M2: all of M1 plus money market mutual fund balences, certificates of deposit, and Euro dollars

_____ are temporary investments of excess cash in bonds and stocks that can readily be converted into cash. Accounts receivable Marketable securities Notes payable Owners' net contribution margins

Marketable securities

_____ is arrived at by subtracting current liabilities from current assets. Owners' equity Net profit Retained earning Net working capital

Net working capital

3M Consumer Healthcare has introduced a "Home 'n Go Pack" packaging concept that organizes each of its bandage offerings into a separate plastic pouch within the bandage box. The pouch is visible through a window in the external packaging. The decision to offer this new packaging was made as part of the _____ strategy.

product

5 P's of marketing

product, price, place, promotion, people

Lee Robi has developed an electronic lice comb that tells whether head lice are present by emitting an audible sign. Robi has mailed promotional flyers on the lice comb to all the school districts in the nation. He has also run ads in several different women's magazine. This describes the _____ strategy that Robi used.

promotion

managerial accounting

provide financial info so managers can make decisions

Customer satisfaction:

refers to the customer's feeling that a product has met or exceeded expectations

_____ is a strategy that focuses on forging long-term partnerships with customers.

relationship marketing

Which of the following is an example of an asset that might be owned by a minor league baseball team? - salaries owed to its players - the cost of getting tickets printed - reputation as a winning team - the price made for advertising on local radio

reputation as a winning team

Liquidity ratios measure: short-term financial stability long-term financial stability annual sales and profits ability to pay dividends

short-term financial stability

Finding a place to live in Mumbai, India, has been getting harder these days for people who are not vegetarians. Vegetarianism is a centuries-old custom among the Indian population, but the requirement is becoming more obvious as non-vegs are being segregated from vegs. A real estate broker in Mumbai who will only rent or sell a home to a vegetarian as defined that group as its:

target market

The _____ is a specific group of consumers toward which a firm directs its marketing efforts.

target market

discount rate - tool

the interest rate that the FED charges its member banks (tools for carrying out monetary policy)

open market operations - tool

the purchase and sale of U.S. government bonds by the Fed

FED's Mission

to oversee the nations monetary and credit system to support on going operation and americas private banking system

Purpose of the Statement of Cash Flows

to report cash receipts (inflows) and cash payments (outflows) during a period

Diapers is a product category in the maturity stage of its product life cycle. This means that the manufacturers of diapers:

are creating product line extensions

Things of value owned by a firm are called its:

assets

FED's Responsibilities

carrying out monetary policy setting rules on credit distributing currency making check clearing easier

reserve requirement - tool

cash in their vaults or in an account at a district bank

U.S. Money supply is made up of:

currency - cash demand deposits - consist of $ kept in checking accounts that CAN be withdrawn by depositors time deposits - are deposits at a bank that pay interest but CANNOT be withdrawn on command

Financial intermediation is the process in which:

financial institutions act as intermediaries between the suppliers and demanders of funds

financial accounting

focuses on preparing external financial reports that are used by outsiders

_____ is a summary of what a company has earned and spent over a given period. balance sheet income statement cash flow statement trial balance

income statement

The Federal Deposit Insurance Corporation (FDIC):

insures deposits in commercial banks

Trademarks, franchises, patents, and copyrights are carried on the company's books as: tangible assets intangible assets owners' equity long-term assets

intangible assets

Product Life Cycle

introduction, growth, maturity, decline - Establish awareness -> get new users and more market share -> extend life cycle by opening new markets (Iphone in india and china) -> no need to market product sells itself

_____ is the division of markets into different groups

market segmentation

The _____ is based on the five P's.

marketing mix

functions of money

medium of exchange, standard of value, store of value

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 negative number. negative liability net loss owners' negative equity net expense

net loss

Maria Manow is planning to sell handmade quilts over the Internet. As she decides what to charge for a full-sized quilt, Manow will calculate her fixed and variable costs. At this point, Manow will be developing her _____ strategy.

pricing

There are two types of expenses recorded on the income statement. They are: - cost of goods sold and operating expenses - cost of goods sold and production costs - operating expenses and administrative expenses - sales expense and cost of goods sold

- cost of goods sold and operating expenses

Categories of Envir. Data that shape decisions

1. cultural/socail forces 2. demographic forces 3. economic forces 4. technological forces 5. political/legal forces 6. competitive forces

A company that specializes in planning parties for children had $7,000 worth of inventory on January 1, 2018, and it had $5,000 worth of inventory on December 31, 2018. If its cost of goods sold for that period was $3,000, and its net profit was $9,000, what was its inventory to turnover ratio? 1 time 1.5 times 2 times 3 times

2 times

Which of the following statements about the accounting profession is true? - Most CPAs first work for public accounting firms and later become private accountants or financial managers. - Managerial accountants become a certified management accountant when they meet the requirements of the professional certification program. - Private accountants are also called corporate accountants. - All of the above statement about the accounting profession are true.

All of the above statement about the accounting profession are true.

Depository Institutions

Commercial banks and thrift institutions; financial institutions that accept deposits from the public

_____ is the company's ability to expense fixed assets over their useful life. Acceleration Depreciation Capital budgeting Maturation

Depreciation

_____ is the process in which a firm continuously collects and evaluates information about its external environment.

Environmental scanning

Managerial accounting provides information that would probably be most beneficial to: the IRS financial analysts a lending officer of the bank a middle manager of the company

a middle manager of the company

The _____ ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted from current assets. inventory acid-test net worth profitability

acid test

The _____ ratio measures the relationship between the amount of debt financing and the amount of equity financing. liability-to-asset debt-to-revenue liability-to-ownership debt-to-equity

debt-to-equity

Net sales: - is determined by adding total sales for the accounting period - is calculated once profit after all expenses are paid - is determined once profit after cost of goods sold is deducted - deducts sales discount and returns and allowances from gross sales deducting sales discount and returns and allowances from gross sales

deducts sales discount and returns and allowances from gross sales deducting sales discount and returns and allowances from gross sales

The manufacturer Mike and Ike, the fruit-flavored chewy candies, has changed its packaging and developed contests all geared to 12- to 17-year-olds. What type of market segmentation identifies its market?

demographic

Financial institutions can be divided into two broad categories. These are ______ institutions.

depository and nondepository

Accounting provides a framework for looking at: - past performance - current financial health - possible future performance - all of the above

ALL OF THAT ABOVE

The ratio of net profit to the number of shares of common stock outstanding is called the: earnings for profit earnings per share stock-to-earnings ratio equity earnings

earnings per share

The Financial Accounting Standards Board (FASB) is a:

private organization that is responsible for establishing financial accounting standards in the United States

Federal Reserve banks must hold a certain portion of their deposits in reserve. This percentage is called the:

reserve requirement

The marketing concept:

satisfies customer wants and needs legally and responsibly