BADM Final Part 4 Accounting

The system used to record a firm's financial transactions in a routine and clerical process.

Bookkeeping

True or False: "The balance sheet summarizes the firm's revenues, expenses, and total profit or loss over a period."

False

True or False: "The income statement is a summary of the money flowing into and out of a firm during a certain period, typically one year."

False

True or False: "The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activity for internal use is financial accounting."

False

True or False: The income statement summarizes a firm s financial position at a specific point in time.

False

What is the income statement?

Income statement summarizes the firm's revenues and expenses and shows its total profit or loss over a period of time.

What is the difference between managerial accounting and financial accounting?

Managerial accounting provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations. Financial accounting focuses on preparing external financial reports that are used by outsiders who have an interest in business but are not part of the company's management.

What is the difference between a public accountant and a private accountant?

Public accountant is an independent accountant who serves organizations and individuals on a fee basis. Private accountants are accountants employed to serve one particular organization.

_____ involves calculating and interpreting financial ratios taken from the firm's financial statements to assess its condition and performance.

Ratio analysis

True or False: "The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activity for external use is financial accounting."

True

True or False: "The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activity for internal use is managerial accounting."

True

What is the statement of cash flows?

a summary of money flowing in and out of a firm, is the financial statement used to statement used to assess the sources and uses of cash during a certain period, typically one year.

Accounting provides a framework for looking at:

all of the above

Things of value owned by a firm are called its:

assets

Which of the following calculations is a formal expression of the accounting equation?

assets = liabilities + owners' equity

"An accountant who has a bachelor's degree, passes a test prepared by the professional organization AICPA, and has a certain number of years of on-the-job training becomes a:"

certified public accountant

Computers can enhance accounting by:

doing all of these

"To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:"

generally accepted accounting principles

Managerial accounting provides all the following financial information EXCEPT:

income statements

Which of the following is an example of a liability that might be owned by an antique mall?

money owed to utility companies

Another term for owners' equity is:

net worth

Which of the following is NOT one of the six steps in the accounting cycle?

paying accounts payable

A(n) _____ is a summary of the money flowing into and out of a firm.

statement of cash flows

What is the accounting cycle?

the process of generating financial statements, beginning with business transactions and ending with the preparation of the report.