intro to business

4

A kennel designed for boarding small dogs has current assets of $8,000, current liabilities of $2,000, and fixed assets of $25,000. The small company has a current ratio of:

a long-term liability

Ennis Worth has a six-month loan for $7,500 that he used to refurbish the fishing boat he uses to earn his living. This loan is an example of:

net sales

Gross sales for Nevada Silver, a retailer of silver jewelry was $120,000 for the month of May. Sales discounts amounted to $18,000. There were no returns. The difference, $102,000, is Nevada Silver's:

short-term financial stability

Liquidity ratios measure:

the sale of land adjacent to the manufacturer's administrative office building

On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from investment activities section would include

determine how efficiently a company is being managed

Profitability ratios are used to:

depreciation

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:

pushing for major changes in GAAP

The Financial Accounting Standards Board (FASB) is currently:

liquidity

The ratios that are of special interest to the firm's creditors and measure the firm's ability to pay short-term debts as they come due are called _____ ratios

generally accepted accounting principles

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:

gross profit

U.S. Carburetion Inc. makes natural gas and gasoline powered generators. Assume the company had $100,000 in net sales for the week of September 11th. Cost of goods sold was $42,000. On an income statement, the remaining $58,000 would be classified as:

operating

What type of expense would be shown on an income statement when the owner of a dirt racing track promoted an upcoming race by purchasing advertising time on a local radio station?

cans of yellow paint for refurbishing equipment

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

operating

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

increases in the manufacturer's inventoryRATIONALE: Financial activities relate to the debt and equity financing.

On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from operating activities would include:

the money borrowed to purchase the furniture in the tutorial area and the interest owed on that debt

On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities would include:

general and administrative

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

statement of cash flows

A(n) _____ is a summary of the money flowing into and out of a firm.

summarizing

Accounting involves the _____ of the financial activities for firms.

2

Assume a company has inventory valued at $50,000, its total current assets, including this inventory, total $90,000. Its total current liabilities total $20,000. Its quick ratio is:

cost of goods sold

Haley Optics manufactures lens used in cameras, binoculars, and scientific equipment. It had sales of $300,000 during the last quarter. Its gross profit sold was $120,000. On an income statement, an accountant would classify the remaining $180,000 as:

$6,000

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:

private organization that is responsible for establishing financial accounting standards in the United States

The Financial Accounting Standards Board (FASB) is a:

balance sheet

The _____ summarizes an organization's financial status at the end of an accounting period

paying accounts payable

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

reputation as a winning team

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

a patent on titanium lock mechanism

Which of the following is an example of an intangible asset for a manufacturer of padlocks?

retained earnings

Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?

Marketable securities

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

Debt

_____ ratios measure the degree and effect of the firm's use of borrowed funds to finance its operations.