Chapter 14 quiz

Administrative accounting is the term given to the internal workings of the company, such as budgets, sales reports, and analyses of how well marketing strategies are working. True/False

False

The $350 charged to the homeowner for electrical work performed one month ago is an example of a note receivable. True/False

False

Which of the following assets is NOT an example of a fixed asset for a manufacturer of road building equipment?

cans of yellow paint for refurbishing equipment

The ratio of total current assets to current liabilities is called the _____ ratio.

current

For which of the following assets would a wholesale company use depreciation?

its warehouses

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

money owed to utility companies

After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the _____ when it is a negative number.

net loss

After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the _____ when it is a positive number.

net profit

Which of the following is NOT really a financial ratio though it is often used to measure a firm's overall liquidity?

net working capital

Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in financial statements?

operating

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

paying accounts payable

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team

The first step in the accounting cycle is to:

analyze business transaction documents

The ratio of net profit to the number of shares of common stock outstanding is called the:

earnings per share

On an income statement, operating expenses that cannot be linked to cost of goods sold or to sales are called _____ expenses.

general and administrative

Assume the net profit for manufacturer of mountain bikes was $1,000,000 last year. The firm paid out $40,000 in dividends and has 200,000 shares of common stock outstanding. Its earnings per share (EPS) was:

$5

Holiday Confections has the following balance sheet figures for the year ending December 31, 2018:Cash $1,000Marketable securities 5,000Inventory 3,000$9,000Accounts payable $2,000Notes payable 1,000$3,000Its net working capital is:

$6,000

Which of the following statements about the accounting profession is true?

Accountants are typically classified as private or public accountants.

_____ are debts that are to be paid within twelve months.

Current liabilities

____ are temporary investments of excess cash in bonds and stocks that can readily be converted into cash.

Marketable securities

A short-term loan from a bank, supplier, or others that must be repaid within a year is a(n):

account payable

A current asset is one that can or will be converted into cash within one year. True/ False

True

Independent accountants who serve organizations and individuals on a fee basis are called public accountants. True/False

True

Amounts owed to the firm by customers who bought goods and services on credit are called:

accounts receivable

Sullins Cleaning Service has purchased a new pressure washer for $18,000. Sullins Cleaning is allowed to charge a portion of the company's cost during its useful life against the profits it generates. This practice is called:

depreciation

Profitability ratios are used to:

determine how efficiently a company is being managed

Accountants employed within organizations are called:

private accountants

The Financial Accounting Standards Board (FASB) is currently:

pushing for major changes in GAAP

Managerial accounting provides all of the following financial information EXCEPT:

income statements