BUSI 1301 17 HW

Georgina's company reported net income after taxes of $2 million, on sales of $225 million. Her boss asked her to calculate the earnings per share for stockholders. Georgina noted that the company's balance sheet showed 44 million stock shares outstanding. To explain to him that her calculation is correct, Georgina's correct response is

$0.045 per share. Basic earnings per share is calculated by taking net income after taxes and dividing by the total number of common stock shares outstanding.

What statement is accurate regarding double-entry bookkeeping?

With double-entry bookkeeping, if the transaction amounts are not equal, the bookkeeper knows there is a mistake.

The recording of business transactions is a basic part of financial reporting and is referred to as

bookkeeping

Buying and selling goods, acquiring insurance, and using supplies represent __________Blank transactions.

financial

As a result of accounting scandals, what legislation created new government reporting standards for publicly traded companies?

the Sarbanes-Oxley Act

A debt to owners' equity ratio of over 100 percent would mean

the company has more debt than equity.

What is an important difference between bookkeepers and accountants?

Accountants analyze financial statements.

The fundamental accounting equation is

Assets = Liabilities + Owner's Equity.

A Certified Public Accountant (CPA) is

a public or private accountant.

A summary of all the financial data in the account ledgers that ensures the figures are correct and balanced is called

a trial balance

Which asset would be considered to be the most liquid?

current assets

What two accounts are needed to calculate a firm's current ratio?

current assets and current liabilities

__________Blank accounting generates accounting information and analyses prepared for people outside the organization.

financial

What provides key insights by analyzing the financial performance of a company?

financial ratios

A primary purpose of accounting is to

help managers make well-informed decisions.

In order for information to be meaningful, a firm's accounting processes and procedures should be certified as accurate by acceptable accounting standards. Companies hire __________Blank to provide unbiased opinions about the accuracy of a firm's financial statements.

independent auditors

An example of a current asset for a medical supply company would be its

inventory

A specialized accounting book in which information is accumulated into specific categories and posted so managers can find all information about one account in the same place is a

ledger

Lloyd's boss asked him to determine if their company is operating with too many borrowed funds. Which ratio will Lloyd utilize to help him with his decision?

leverage

What would be considered an intangible asset?

patents

Chavez is an accountant who works for a number of businesses as a consultant. He has helped to design an accounting system, provides accounting services, and has analyzed the financial strength of many of his clients. Chavez is working as a

public accountant

Accumulated earnings from a firm's profitable operations that are kept in the business and not paid out to stockholders are called

retained earnings

Small businesses that are just getting off the ground often have problems with the difference between cash coming into the business and cash going out of the business. For example, if the company allows far too lenient credit sales terms, customers do not pay on time, which could cause cash to come in too slowly. That's why the __________Blank is a key financial statement of any business.

statement of cash flows

Which activity is associated with accounting?

summarizing and interpreting company financial information

In a private company's accounting system, inputs are __________Blank and examples of outputs are __________Blank.

transactions such as sales, payroll, and other expenses; financial statements