Chap 14 Quiz

_____ ratios are ratios that measure how well a firm uses its assets.

Activity

_____ are things of value owned by the firm, such as cash, equipment, and buildings.

Assets

______ are bills and claims that will have to be paid within the next twelve months.

Current liabilites

_____ accounting focuses on preparing the financial reports used by managers and outsiders to track the firm's performance and compare it with other firms.

Financial

_____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm. 1. External accounting; Internal accounting 2. Financial accounting; Auditing 3. Financial accounting; Managerial accounting 4. Bookkeeping; Financial accounting 5. Auditing; Managerial accounting

Financial accounting; Managerial accounting

IN YOUR OWN WORDS... Using at least 50 words, identify and explain accountant's term is used to describe the $1 million a mining company borrowed in order to purchase new equipment. (It's more than just a "loan")

Liability

IN YOUR OWN WORDS... Using at least 50 words, explain another name for the ratio of net profit to net sales and what information it provides.

Net Profit Margin is the ratio of net profit to net sales

_____ earnings are the amounts left over from profitable operations since the firm's beginning.

Retained

T or F: A current asset is one that can or will be converted into cash within one year.

True

T or F: An accounting journal is a chronological list of transactions, each assigned to a particular account.

True

T or F: Earnings per share (EPS) is the dollar amount earned by each share, not the actual amount given to stockholders in the form of dividends.

True

T or F: Independent accountants who serve organizations and individuals on a fee basis are called public accountants.

True

T or F: The usual expression of the accounting equation is Assets = Liabilities + Owners' Equity.

True

Things of value owned by a firm are called its: 1. owners' equity 2. liabilities 3. tangibles 4. assets 5. intangibles

assets

Which of the following assets is NOT an example of a fixed asset for a manufacturer of road building equipment? 1. cans of yellow paint for refurbishing equipment 2. warehouse building for storing finished equipment 3. employee parking lot 4. shipping area for finished goods and receiving area for component parts 4. production equipment for assembling engines

cans of yellow paint for refurbishing equipment

Managerial accounting provides all of the following financial information EXCEPT: 1. monthly sales records 2. budgets 3. payroll summaries 4. income statements 5. production reports

income statements

For which of the following assets would a wholesale company use depreciation? 1. gasoline used to power its delivery trucks 2. its inventory of unsold merchandise 3. its warehouses 4. its accounts receivable 5. its patented computer tracking equipment

its warehouses