Ent 202 final exam

________ measures the extent to which a business can meet its obligations for the long haul.

Debt-to-equity ratio

________ ratios measure the business's ability to pay debts and expenses that are due in the current accounting period.

Liquidity

Which of the following is a drawback to financing with debt?

Payment is expected even if you have no money to make the payment.

________ refers to amounts that are owed to a business for merchandise that was sold on credit.

Receivables

Which of the following is the cost incurred in financing, insuring, taxing, or tracking an asset?

cost of owning

________ refers to a set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.

internal control

The term ________ is associated with objectively evaluating how well someone is doing their job.

job metrics

The practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer is termed as

just-in-time inventory.

________ refers to the concept that key employees should be able to see and understand a firm's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the strategy and success of the firm.

open-book policy

________ is a formal, rule-based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators.

Financial accounting

The emphasis of financial management during the ________ phase is to obtain increasing amounts of cash inflows to pay for added inventory, productive assets, and employees.

Growth

Which of the following statements is not true of using insurance to manage business risk?

It is possible to use insurance to avoid all types of business risk.

At the ________ stage of a business, the emphasis of financial management is to build owner wealth, to conserve assets, to match cash inflows to outflows, and to maximize the return on capital assets by making optimal investing decisions.

Operations

Properly prepared financial statements agree such that the cash flow statement provides the ending cash balance for the

balance sheet

As a business owner, if you have a group of people you assemble because you trust their judgment and goodwill toward you and your firm who may meet with you as a group, or individually for impromptu meetings are considered your

board of advisors

A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave.

cash budget

Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called

cash flow from operations.

During the start-up phase of a business, the emphasis is on

conserving what little cash the business has.

This ratio is determined by dividing current assets by current liabilities.

current ratio

To protect your business from having cash drained by employees, you first must hire honest and ethical people, and secondly,

develop and enforce effective internal control over who may handle cash and who may account for cash.

Making ________ work requires giving employees permission to act, the knowledge to act, and the skill to act.

empowerment

Which of the following answer options is not one of the most commonly identified sources of U.S. business risk small businesses face?

government instability

A(n) ________ is a valuable process that can greatly help an employer with the issues of keeping risks at acceptable levels. It is strictly a management tool that is not provided to outsiders; it can be structured and conducted in any systematic manner the owner finds acceptable.

internal audit

A(n) ________ defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position.

job description

In the accounting equation, assets equal

liabilities plus owner's equity.

An accounting method that is specifically intended to be used for planning, directing, and controlling a business is called

managerial accounting

Amounts owed to vendors for merchandise or services purchased on credit are called

payables

The amount of time it takes a business to earn back the funds it paid out to obtain a capital asset is referred to as the

payback period

________ refers to a type of periodic inventory that conducts a count of the entire inventory being held for sale at a specific point in time.

physical inventory

Giving a third party legal rights to debts owed by the business in order to provide assurance that borrowed money will be repaid is called

pledging receivables

________ is an accounting approach based on specific accounting requirements set by governmental taxing agencies.

tax accounting

One of the first steps in developing a compensation plan is

to determine whether hiring is to be done for an hourly or salaried position.

The first task to be completed before a comprehensive insurance program for a business can be developed is

to identify risks