Business Essentials Unit 4.0 Obj 4.01 SG

What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts?

Accrual method

Determining which projects a business should invest in is known as

capital budgeting

Selling shares in the company to raise money for a new venture is referred to as __________ funding.

equity

Checks, receipts, invoices, and purchase orders are examples of

source documents

Which of the following categories of information are found on a balance sheet:

Assets, liabilities, owner's equity

Which of the following is a true statement:

Bookkeeping records business transactions

Which of the following is a key component of managing working capital:

Cash conversion cycle

Which of the following is a measure of how well a business generates cash flow:

Return on capital

Money the business owes is known as

accounts payable

Money owed to the business is known as

accounts receivable

For an accounting system to be useful to the business, the accounting information it contains must be

accurate and up to date

The cash conversion cycle should be

as short as possible

When return on capital is positive, the company is

growing in value

Riley is an employee of the federal government who studies the financial reports of majorbusinesses in a specific industry. The government's purpose in assigning this task to Riley is to

identify trends in the industry

To keep communication flowing with other departments, the finance function depends on

information systems

The administration of assets refers to decisions about

investments

The finance function would definitely be involved in a decision regarding

new business projects and strategies.

Accounting is distinct from finance because its main focus is on

recordkeeping activities

The goals of the finance function are to ensure profitability and

reduce risks

Accounting records for a business show that the week's total sales revenues were $125,000. Cash sales accounted for $50,000 and credit sales, $75,000. This is an example of

the accrual method of accounting

A company's current balance of assets and liabilities falls under the focus of

working capital management