Ch 14 Intro to business
In using the accounting equation, if assets = $40,000 and liabilities = $30,000, then owner's equity is equal to ______.
$10,000
Which are considered to be the working areas of accounting?
-managerial accounting -government and not-for-profit accounting -tax accounting -financial accounting -auditing
____________ratios tell us how effectively management is turning over inventory.
Activity
True or false: Gross profit is what a company shows on their income statement as the bottom line figure.
False
_________ ratios measure a company's ability to turn assets into cash to pay its short-term debt.
Liquidity
What are four main types of financial ratios used in ratio analysis?
Liquidity ratios Debt ratios Activity ratios Profitability ratios
What are four main types of financial ratios used in ratio analysis?
Profitability ratios Debt ratios Liquidity ratios Activity ratios
__ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm.
Revenue
What is considered to be the "language of business"?
accounting
__________ are economic resources owned by a firm.
all revenue minus all expenses and taxes
The first step in the accounting cycle is to ______.
analyze source documents
The information and analysis that comes from managerial accounting is used to ______.
assist managers inside the organization with their decision making
The key working areas of accounting include managerial accounting, financial accounting, tax accounting, government and nonprofit accounting, and ___________.
auditing
The statement of cash flows is a financial statement that shows ______.
cash receipts and disbursements
Which three activities are part of the function of accounting?
classifying financial transactions recording financial transactions interpreting financial transactions
Users of managerial accounting information include ______.
department managers the Chief Financial Officer
On a balance sheet, assets may include ______. (Select all that apply)
goodwill intangible resources tangible resources
The role of an auditor is to ______.
government and not-for-profit accounting tax accounting managerial accounting financial accounting auditing
Managerial accounting is used to provide information ______.
inside the firm
What is another name for debts?
liabilities
The formula for the costs of goods sold is ______.
purchase price + freight charges + storage costs
Government and nonprofit accounting involves working for organizations whose purpose is to serve ______.
ratepayers taxpayers
Cash flow analysis is especially important for which of the following?
small businesses
The primary users of government and nonprofit accounting information are ______.
special interest groups taxpayers legislative bodies
Through the recording, classifying, summarizing, and interpretation of financial events in an organization, the function of ______ helps managers make good decisions about the firm's operations.
speed