Quiz 13 Chapter 18 "Financial Statements"

Which of the following takes place when a company sets its standards by comparing data from other companies and similar industries to its own?

Benchmarking

Which of the following is NOT a characteristic of accounting?

Accounting is an end in itself

From this week's video, a balance sheet shows a company's profit and loss statement over a specific period of time.

False

The main purpose of managerial accounting is:

To be used within an organization

Which of the following is NOT a purpose of financial accounting?

To organize information for management

Suppose you are analyzing financial statements of a client. You should take into account which of the following factors?

All of these answers: *Industry trends *Changes in price levels *Economic conditions

Which formula represents a current ratio?

Current Assets/Current Liabilities

Assume that the total debt for Bounded Inc. was 9000 instead of 6500. How would this affect the implications of the debt ratio?

Risk would increase

Analyzing which financial statement will tell you about the financial health of a firm?

The balance sheet

Assume you are doing a liquidity test of a client before lending the client firm money. You realize that the quick ratio is .45. This indicates that:

The firm may not be able to meet current obligations

From this week's video, an income statement shows a company's profit and loss statement over a specified period of time.

True

From this week's video, the 3 basic financial statements are balance sheet, statement of cash flows, and income statement.

True