Chap 17 - Business

If financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable? Multiple choice question. lending institutions operations accounting information financial software

accounting information

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. Multiple choice question. activity ratios liquidity ratios leverage ratios debt ratios

activity ratios

The ratios that measure the effectiveness of a firm's management in turning over inventory are called ______. Multiple choice question. quick ratios activity ratios leverage ratios liquidity ratios

activity ratios

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 ______. Multiple choice question. financial transactions tax returns annual report budgets

annual report

The _____________ ____________ provides information about a company's financial status to company managers, owners, government agencies, and the general public.

annual report

The ______________ ______________provides information about a company's financial status to company managers, owners, government agencies, and the general public.

annual report

Fill in the blank question. Reviewing and evaluating of records used to prepare a company's financial statements is referred to as _______________.

auditing

Reviewing and evaluating records used to prepare a company's financial statements is referred to as ______. Multiple choice question. auditing accounting reporting bookkeeping

auditing

The key working areas of accounting include managerial accounting, financial accounting, tax accounting, government and nonprofit accounting, and _____________.

auditing

Leverage or debt ratios measure the degree to which a firm relies on ______. Multiple choice question. borrowed funds profitability tangible assets owners equity

borrowed funds

Leverage or debt ratios measure the degree to which a firm relies on ______. Multiple choice question. tangible assets borrowed funds owners equity profitability

borrowed funds

It's possible for a business to increase its sales and profits yet still suffer ___________ flow problems.

cash

The statement of cash flows is a financial statement that shows ______. Multiple choice question. assets and liabilities cash receipts and disbursements changes in stockholders equity revenues and expenses

cash receipts and disbursements

An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______. Multiple choice question. double-entry accounting computerized accounting programs a trial balance the accounting cycle

computerized accounting programs

In accounting, liabilities refer to ______. Multiple choice question. debts a business owes to others cash transactions associated with running a business the economic resources of a firm the different forms of revenue a firm generates

debts a business owes to others

Users of managerial accounting information include ______. (Select all that apply) Multiple select question. department managers Internal Revenue Service the Chief Financial Officer potential investors

department managers the Chief Financial Officer

A summary of all the financial transactions that have occurred over a particular period is referred to as a ______. Multiple choice question. tax return annual report journal entry financial statement

financial statement

Because they indicate a firm's financial health and stability, the use of ______ are key factors in management decision making. Multiple choice question. annual reports ledger entries tax returns financial statements

financial statements

_______________ accounting generates financial information for people outside the firm, while ______________accounting generates financial information for people inside the firm

financial; managerial

What is another name for debts? Multiple choice question. assets liquidity equity liabilities

liabilities

The current ratio is an example of a(n) _____________ ratio that measures a company's ability to turn assets into cash to pay its short-term debts. Listen to the complete question

liquidity

The current ratio is an example of a(n) _____________ratio that measures a company's ability to turn assets into cash to pay its short-term debts.

liquidity

Which are considered to be the working areas of accounting? (Select all that apply) Multiple select question. managerial accounting financial accounting auditing bank accounting government and not-for-profit accounting tax accounting

managerial accounting financial accounting auditing government and not-for-profit accounting tax accounting

In operating a business, rent, salaries, supplies, utilities and insurance are all examples of ______. Multiple choice question. operating expenses liabilities revenue accounts assets

operating expenses

The major categories of the balance sheet are assets, liabilities, and ______. Multiple choice question. income retained earnings owners' equity profit

owners equity

The value of what stockholders own in a firm minus any liabilities is called ______. Multiple choice question. retained earnings operating income owners' equity deferred income

owners' equity

Financial accounting and managerial accounting differ in terms of who uses the information. Financial accounting provides information primarily for ______. Multiple choice question. people inside the organization people outside the organization the government managerial accountants

people inside the organization

A business that does not need a full-time accountant, would most likely use a ______ accountant in which services are exchanged for a fee. Multiple choice question. private specialized public internal

public

The formula for the costs of goods sold is ______. Multiple choice question. purchase price + freight charges + storage costs purchase price -returns-freight and storage charges purchase price + returns - allowances purchase price + freight charges + taxes

purchase price + freight charges + storage costs

Calculating and interpreting financial ratios developed from the firm's financial statements is called: Multiple choice question. ratio analysis income analysis financial analysis asset analysis

ratio analysis

Which are steps in the accounting cycle? (Select all that apply) Multiple select question. record transaction in the journal build a budget analyze transactions prepare a trial balance determine investment opportunities

record transaction in the journal analyze transactions prepare a trial balance

Which are steps in the accounting cycle? (Select all that apply) Multiple select question. record transaction in the journal build a budget determine investment opportunities analyze transactions prepare a trial balance

record transaction in the journal analyze transactions prepare a trial balance

An indirect measure of risk that tells us how much a firm earned for each dollar invested by its owners is called ______. Multiple choice question. the current ratio return on equity earnings per share return on sales

return on equity

The monetary value of what a firm received for goods sold, services rendered, and other payments is termed ______________ .

revenue

Cash flow analysis is especially important for which of the following? Multiple choice question. the federal government small businesses the state government large businesses

small businesses

Cash receipts and disbursements related to operations, investments, and financing are reported on the ______. Multiple choice question. statement of cash flows income statement balance sheet ledger

statement of cash flows

On a balance sheet, assets may include ______. (Select all that apply) Multiple select question. tangible resources retained earnings intangible resources goodwill bonds payable

tangible resources intangible resources goodwill

What type of accountant is most likely to develop strategies for a firm in dealing with the Internal Revenue Service? Multiple choice question. tax accountant private accountant certified internal auditor management accountant

tax accountant

Government and nonprofit accounting involves working for organizations whose purpose is to serve ______. (Select all that apply) Multiple select question. stockholders taxpayers ratepayers partners

taxpayers ratepayers

Stockholders, or owners' equity represents ______. Multiple choice question. the value of the corporate stock on the market the amount the owners owe in debt the total value of what a business owns the value of the business that belongs to owners

the value of the business that belongs to owners

Return on equity is net income minus taxes divided by ______. Multiple choice question. net sales current liabilities total owners' equity common stock outstanding

total owners' equity

In using the accounting equation, if assets = $40,000 and liabilities = $30,000, then owner's equity is equal to ______. Multiple choice question. $10,000 $80,000 $70,000 $20,000

$10,000

In the fundamental accounting equation:_____________ = Liabilities + Owners' equity.

Assets

What are four main types of financial ratios used in ratio analysis? Multiple select question. Debt ratios Profitability ratios Income ratios Activity ratios Liquidity ratios Tax ratios

Debt ratios Profitability ratios Activity ratios Liquidity ratios

True or false: Gross profit is what a company shows on their income statement as the bottom line figure. True false question. True False

False (Net income is the bottom line)

The principles, defined by FASB, that accountants must follow to assure that a firm's accounting information is accurate are abbreviated as ______. Multiple choice question. SEC FASB GAAP CPA

GAAP

___________ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm. Multiple choice question. Interest Revenue Rent Sales

Revenue

Assets, liabilities, and owners' equity are the major accounts listed on ______. Multiple choice question. a balance sheet a profit and loss statement a statement of cash flows an income statement

a balance sheet

The income statement shows ______. Multiple choice question. a firm's profit (or loss) after costs, expenses, and taxes the basic accounting equation inflows and outflows of cash a firm's assets, liabilities, and stockholders equity

a firm's profit (or loss) after costs, expenses, and taxes

Recording, classifying, summarizing, and interpreting financial events in an organization is referred to as ______. Multiple choice question. investing accounting management finance

accounting