Chapter 14 SmartBook
A summary of all the financial transactions that have occurred over a particular period is referred to as a ______. annual report tax return journal entry financial statement
financial statement
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. accounting management finance investing
accounting
What term describes the cost of merchandise the firm sells? cost of goods sold cost of goods relinquished cost of goods produced cost of goods returned
cost of goods sold
A tax accountant has specialized and learned tax ____ and is responsible for preparing tax returns.
law(s) or legislation
What is an annual report? A specialized record book or computer program that contains summaries of all journal entries A yearly statement of a firm's financial condition, progress and expectations The recording or entry of debt in an account A record book or part of a computer program containing the daily record of a firm's transactions
A yearly statement of a firm's financial condition, progress and expectations
_______ and nonprofit accounting supports organizations whose purpose is not generating a profit, but serving ratepayers, taxpayers, and others according to a duly approved budget.
Government
What are the major categories on the balance sheet? (Select all that apply) cash balance assets liabilities retained earnings owners' equity
assets liabilities owners' equity
Which three components make up the fundamental accounting equation? owners' equity liabilities income expenses assets
owners' equity liabilities assets
Financial accounting and managerial accounting differ in terms of who uses the information. Financial accounting provides information primarily for ______. people inside the organization people outside the organization the government managerial accountants
people outside the organization
In using the accounting equation, if assets = $40,000 and liabilities = $30,000, then owner's equity is equal to ______. $70,000 $80,000 $10,000 $20,000
$10,000
The relationship among assets, liabilities, and owners' equity is a fundamental concept in accounting known as the ______ equation. accounting income profit equity
accounting
The information and analysis that comes from managerial accounting is used to ______. prepare tax returns and financial statements required by the IRS audit the firm's business activities and verify the accuracy of financial statements assist managers inside the organization with their decision making provide information to potential investors of the firm
assist managers inside the organization with their decision making
In operating a business, rent, salaries, supplies, utilities and insurance are all examples of ______. revenue accounts liabilities assets operating expenses
operating expenses
The statement of cash flows reports cash receipts and disbursements related to _________, investments, and financing.
operations
The first step in the accounting cycle is to ______. perform an internal audit record transactions in journals take a trial balance analyze source documents
analyze source documents
Which of the following are considered disciplines within the accounting profession? (Select all that apply) investment accounting financial accounting managerial accounting tax accounting
financial accounting managerial accounting tax accounting
Because they indicate a firm's financial health and stability, the use of ______ are key factors in management decision making. annual reports tax returns ledger entries financial statements
financial statements
In the accounting equation, what is the term for the difference between assets and liabilities? income debt owners' equity retained earnings
owners' equity
The major categories of the balance sheet are assets, liabilities, and ______. owners' equity profit retained earnings income
owners' equity
Managerial accounting is used to provide information to ______. those inside the firm those both inside and outside the firm those outside the firm governmental agencies only
those inside the firm
If financial management is the heartbeat of competitive businesses, what keeps that heartbeat stable? lending institutions operations accounting information financial software
accounting information
The _______ line is another name for net income after taxes.
bottom
What are some benefits of using computers for accounting purposes? (Check all that apply) It frees accountants' time for more important tasks. Software can help if no strong accounting personnel is available. Information can be posted from journals instantaneously. They can make good financial decisions automatically.
It frees accountants' time for more important tasks. Software can help if no strong accounting personnel is available. Information can be posted from journals instantaneously.
______ is the monetary value of what a company received for goods sold, services rendered, and all other payments to the firm. Revenue Sales Interest Rent
Revenue
How do cash flow problems usually start? The firm issues stock. The firm uses improper ratio analysis. The firm has an initial public offering. The firm uses up its credit.
The firm uses up its credit.
The income statement shows ______. the basic accounting equation a firm's profit after costs, expenses, and taxes a firm's assets, liabilities, and stockholders equity inflows and outflows of cash
a firm's assets, liabilities, and stockholders equity
Stakeholders who want to look at detailed financial information on whether a company is profitable, is able to pay its bills, and how much debt it owes will look at the firm's ______. budgets annual report financial transactions tax returns
annual report
Reviewing and evaluating records used to prepare a company's financial statements is referred to as ______. accounting bookkeeping reporting auditing
auditing
_________ accounting generates financial information for people outside the firm, while ________ accounting generates financial information for people inside the firm.
financial; managerial
What type of accountant is most likely to develop strategies for a firm in dealing with the Internal Revenue Service? management accountant certified internal auditor tax accountant private accountant
tax accountant
Which are considered to be the working areas of accounting? (Select all that apply) tax accounting auditing managerial accounting financial accounting government and not-for-profit accounting bank accounting
tax accounting auditing managerial accounting financial accounting government and not-for-profit accounting
Stockholders', or owners' equity represents ______. the value of the corporate stock on the market the amount the owners owe in debt the total value of what a business owns the value of the business that belongs to owners
the value of the business that belongs to owners
A journal is the place where: transactions are changed a trial balance is kept transactions are first recorded financial statements are prepared
transactions are first recorded
What is considered to be the "language of business"? operations accounting finance investing
accounting
Which three activities are part of the function of accounting? classifying financial transactions prioritizing financial transactions recording financial transactions planning financial transactions interpreting financial transactions
classifying financial transactions recording financial transactions interpreting financial transactions
An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______. computerized accounting programs a trial balance double-entry accounting the accounting cycle
computerized accounting programs
An accountant's time is freed up to do more important tasks such as financial analysis due to the assistance provided by using ______. the accounting cycle a trial balance computerized accounting programs double-entry accounting
computerized accounting programs
Which of the following has the highest liquidity? intangible assets fixed assets property current assets
current assets
In accounting, liabilities refer to ______. debts a business owes to others the economic resources of a firm the different forms of revenue a firm generates cash transactions associated with running a business
debts a business owes to others
Where is accounting data first entered? in a ledger on an accounting record in a journal on a balance sheet
in a journal
The ________ statement summarizes revenues, costs, and expenses over a specific period, which may be a week, a month, or a year.
income
What is another name for debts? equity liquidity assets liabilities
liabilities
The ease with which an asset can be converted to cash is called ______. conversion solvency depreciation liquidity
liquidity
The "bottom line" is: the last line on the balance sheet the last line on the statement of cash flows net income or loss after taxes the last line on the income statement
net income or loss after taxes the last line on the income statement
The formula for the costs of goods sold is _____. purchase price + freight charges + storage costs purchase price + returns - allowances purchase price + freight charges + taxes purchase price -returns-freight and storage charges
purchase price + freight charges + storage costs
Government and nonprofit accounting involves working for organizations whose purpose is to serve ______. (Select all that apply) ratepayers stockholders partners taxpayers
ratepayers taxpayers
What is the term for the monetary value of all resources that come into the firm from operating activities? profit gross sales net sales revenue
revenue
The role of an auditor is to ______. invest corporate money into the stock market review and evaluate a company's financial information record daily financial transactions prepare individual and corporate tax returns
review and evaluate a company's financial information
Cash flow analysis is especially important for which of the following? small businesses the federal government large businesses the state government
small businesses
Cash receipts and disbursements related to operations, investments, and financing are reported on the ______. income statement statement of cash flows balance sheet ledger
statement of cash flows
Operating expenses include which of the following? utilities rent supplies capital improvements
utilities rent supplies