BUS 1010, Chapter 15

__________ refers to funds that can be withdrawn all at once from a bank or in multiple withdrawals during the stated period.

A line of credit

________ is the part of an organization's finance department that is responsible for gathering and assembling data required for key financial statements.

Corporate accounting

Which of the following is a firm least likely to use for short-term financing?

Corporate bonds

__________ is financing that does not have to be repaid.

Equity financing

What is the core idea behind double entry bookkeeping?

It recognizes that for every transaction that affects an asset, an equal transaction must also affect either a liability or owners' equity.

Which of the following best describes an income statement?

It reflects a company's profitability.

Which of the following best describes leverage?

It's when you finance an investment with the expectation that the profits from it will be far greater than the interest you will have to pay on the money.

Which of the following is the major difference between managerial accounting and financial accounting?

Managerial accounting is used by employees inside an organization to make decisions, whereas financial accounting is used by interested parties outside an organization to make decisions.

Which of the following is a way to borrow money from other individuals?

Peer-to-peer lending

How does managerial accounting differ from financial accounting?

People inside the firm rely on managerial accounting; people outside of the firm rely on financial accounting.

As an investor, what types of documents would you look at to evaluate a company's past performance and gauge its future performance?

The firm's annual reports

________ reflects the profitability of a company by showing revenue and operating expenses.

The income statement

Which of the following best describes financial managers?

They are employed by firms to help plan and manage a company's financial resources.

To evaluate a company's performance and profitability, prospective and current investors and creditors rely on __________.

financial accounting information

__________ involves tracking a business' income and expenses by recording its financial transactions.

Accounting

__________ is the area of accounting responsible for reviewing and evaluating the accuracy of financial reports.

Auditing

________ recognizes that for every transaction that affects an asset, an equal transaction must also affect either a liability or owners' equity.

Double entry bookkeeping

Which of the following statements is true of accounting?

It provides financial information for decision making, planning, and reporting.

__________ are employed by firms to help plan and manage a company's financial resources.

Financial managers

Which of the following is recorded on a firm's balance sheet?

Goodwill

__________ is an intangible asset that includes a company's reputation, strong brand recognition, and excellent customer or employee relations.

Goodwill

Which of the following is true of equity financing?

It does not have to be repaid.

Which of the following is an accurate statement about accounting?

It is often called "the language of business."

Which of the following is true of corporate accounting?

It is the part of an organization's finance department that is responsible for gathering and assembling data required for key financial statements.

Which of the following best describes peer-to-peer lending?

It is the process of individuals lending money to each other.

Which of the following is true of long-term financing?

It is used when companies take on expansion projects, such as securing new facilities, developing new products, or buying other companies.

For which of the following would a firm most likely use long-term financing?

To open multiple new facilities

Which of the following is true of debt financing?

Usually the lender has little control over how the firm that borrowed the money is being managed.

A firm's __________ is a snapshot of the business at a particular point in time, whereas its __________ shows its profits and losses, and its __________ shows how much cash it generated.

balance sheet; income statement; statement of cash flows