BA 101 Ch 17 Textbook
x ratios tell us how effectively management is turning over inventory.
Activity Rratios
Leverage or debt ratios measure the degree to which a firm relies on ______.
Borrowed funds
What is considered to be the "language of business"?
Accounting
The ratios that measure the effectiveness of a firm's management in turning over inventory are called ______. Multiple choice question. activity ratios liquidity ratios quick ratios leverage ratios
Activity Ratio
Which are considered to be the working areas of accounting? (Select all that apply) tax accounting managerial accounting auditing financial accounting government and not-for-profit accounting bank accounting
tax accounting managerial accounting auditing financial accounting government and not-for-profit accounting
x ratios measure the degree to which a firm relies on borrowed funds in its operations.
Debt Ratios
What is the term for all resources that come into the firm from operating activities?
Revenue
__ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm.
Revenue
Cash flow analysis is especially important for which of the following?
Small Business
An advantage of the use of computers to maintain and compile accounting information is ______.
Speed
The key working areas of accounting include managerial accounting, financial accounting, tax accounting, government and nonprofit accounting, and x.
auditing
What are the three major categories on the balance sheet? Multiple select question. liabilities cash balance retained earnings assets owners' equity
- Assets - Liabilities - Owners' equity
On a balance sheet, assets may include ______. (Select all that apply) Multiple select question. tangible resources retained earnings intangible resources bonds payable goodwill
- Tangible Resources - Intangible Resources - Goodwill
In operating a business, rent, salaries, supplies, utilities and insurance are all examples of ______.
operating expenses
Rent, salaries, supplies, utilities, and insurance are examples of x expenses that are general expenses.
operating expenses
An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______.
computerized accounting programs
What term describes the cost of merchandise the firm sells?
cost of goods sold
The role of an auditor is to ______.
review and evaluate a company's financial information
Which three components make up the fundamental accounting equation?
Liabilities, assets, owners' equity
Net income is ______.
all revenue minus all expenses and taxes
In accounting, liabilities refer to ______.
debts a business owes to others
Which three activities are part of the function of accounting? planning financial transactions classifying financial transactions prioritizing financial transactions recording financial transactions interpreting financial transactions
- classifying financial transactions - recording financial transactions - interpreting financial transactions
Which are steps in the accounting cycle? (Select all that apply) build a budget prepare a trial balance analyze transactions determine investment opportunities record transaction in the journal
- prepare a trial balance - analyze transactions - record transaction in the journal
The relationship among assets, liabilities, and owners' equity is a fundamental concept in accounting known as the _______ equation.
Accounting
Stakeholders who want to look at detailed financial information on whether a company is profitable, is able to pay its bills, and how much debt it owes will look at the firm's ______.
Annual Report
The is the yearly statement of the firm's financial condition, progress, and expectations provided to stakeholders.
Annual Report
x are economic resources owned by a firm.
Assets
Reviewing and evaluating of records used to prepare a company's financial statements is referred to as x
Auditing
It's possible for a business to increase its sales and profits yet still suffer x flow problems.
Cash flow
Because they indicate a firm's financial health and stability, the use of ______ are key factors in management decision making.
Financial Statement
The best way to understand a firm's financial health and stability is to look at its ______.
Financial Statement
An indirect measure of risk that tells us how much a firm earned for each dollar invested by its owners is called ______.
Return on equity
The current ratio is an example of a(n) x ratio that measures a company's ability to turn assets into cash to pay its short-term debts.
Liquidity ratio
x income after taxes is the last line on the income statement.
Net Income
The major categories of the balance sheet are assets, liabilities, and ______.
Owners' equity
Calculating and interpreting financial ratios developed from the firm's financial statements is called:
Ratio Analysis
The first step in the accounting cycle is to ______.
analyze source documents
The information and analysis that comes from managerial accounting is used to ______.
assist managers inside the organization with their decision making
The statement of cash flows is a financial statement that shows ______.
cash receipts and disbursements
Return on x is net income after taxes divided by total owners' equity.
equity
Return on equity is net income minus taxes divided by ______.
total owners' equity
If financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable?
Accounting Information
A x accountant is trained in tax law and is responsible for preparing tax returns.
Tax
How do cash flow problems usually start?
The firm uses up its credit.
Through the recording, classifying, summarizing, and interpretation of financial events in an organization, the function of ______ helps managers make good decisions about the firm's operations.
Accounting
Since converting the firm's inventory to profits is a key function of management, firms use ______ to measure the effectiveness of management in utilizing the assets that are available.
Activity Ratios
What are four main types of financial ratios used in ratio analysis? Multiple select question. Activity ratios Income ratios Debt ratios Profitability ratios Tax ratios
Activity ratios Debt ratios Profitability ratios Liquidity ratios
x and nonprofit accounting supports organizations whose purpose is not generating a profit, but serving ratepayers, taxpayers, and others according to a duly approved budget.
Government
Which financial statement shows a firm's bottom line—its profit (or loss) after costs, expenses, and taxes for a specific period?
Income Statement
Managerial accounting is used to provide information ______.
Inside the firm
The debt a firm owes to others is called a(n) ______.
Liability
x ratios measure a company's ability to turn assets into cash to pay its short-term debt.
Liquidity
The x of x x measures the cost of merchandise the firm sells or the materials and supplies used to manufacture them for sale.
The cost of Goods Sold
The income statement shows ______.
a firm's profit (or loss) after costs, expenses, and taxes
The statement of cash flows reports cash receipts and disbursements related to x, investments, and financing.
operations
The formula for the costs of goods sold is ______.
purchase price + freight charges + storage costs
A x accountant is trained in tax law and is responsible for preparing tax returns or developing tax strategies.
tax accountant
Government and nonprofit accounting involves working for organizations whose purpose is to serve ______. (Select all that apply) taxpayers ratepayers partners stockholders
taxpayers ratepayers