Business Essentials Unit 4.0 Obj 4.01 SG
What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts?
Accrual method
Determining which projects a business should invest in is known as
capital budgeting
Selling shares in the company to raise money for a new venture is referred to as __________ funding.
equity
Checks, receipts, invoices, and purchase orders are examples of
source documents
Which of the following categories of information are found on a balance sheet:
Assets, liabilities, owner's equity
Which of the following is a true statement:
Bookkeeping records business transactions
Which of the following is a key component of managing working capital:
Cash conversion cycle
Which of the following is a measure of how well a business generates cash flow:
Return on capital
Money the business owes is known as
accounts payable
Money owed to the business is known as
accounts receivable
For an accounting system to be useful to the business, the accounting information it contains must be
accurate and up to date
The cash conversion cycle should be
as short as possible
When return on capital is positive, the company is
growing in value
Riley is an employee of the federal government who studies the financial reports of majorbusinesses in a specific industry. The government's purpose in assigning this task to Riley is to
identify trends in the industry
To keep communication flowing with other departments, the finance function depends on
information systems
The administration of assets refers to decisions about
investments
The finance function would definitely be involved in a decision regarding
new business projects and strategies.
Accounting is distinct from finance because its main focus is on
recordkeeping activities
The goals of the finance function are to ensure profitability and
reduce risks
Accounting records for a business show that the week's total sales revenues were $125,000. Cash sales accounted for $50,000 and credit sales, $75,000. This is an example of
the accrual method of accounting
A company's current balance of assets and liabilities falls under the focus of
working capital management