Intro to Business - Chapter 8

The assets of Prosian Italia, a marble and granite company, amount to $400 million, and its liabilities add up to $180 million. Based on the accounting equation, Prosian Italia's owners' equity is equal to _____.

$220 million

Miller is the owner of a restaurant that has several franchises. One of the franchises owes Miller a sum of $18,000 for the goods that he had bought from Miller on credit. In this scenario, the money owed to Miller is known as ______?

Accounts Receivable

The three kinds of basic financial statements that are prepared in financial accounting are:

Balance sheet, income statement, and statement of cash flows

Ginnie's, a candy manufacturing company, sees a sudden rise in the consumption of its kiwi-flavored candies. Thus, the company hires more labor and buys additional supplies to increase the production of these candies. In this scenario, the costs incurred by the company for purchasing these supplies and hiring more labor exemplify the company's _____.

Direct costs

A pharmaceutical company wanted to create a budget that was practical and that would enable its managers to make more accurate comparisons between actual costs and budgeted costs. Thus, the company created a budget that was developed over a range of possible sales levels and was designed to show the appropriate budgeted level of costs for each different level of costs for each different level of sales. Given this information, which of the following budgets did the company create?

Flexible Budget

Daryl is an accountant in Vansert Inc., a multinational healthcare company. He is responsible for providing analysis, preparing financial statements, and reporting the financial transactions of the company to the deputy chairman of the company. In this scenario, Daryl is most likely a ______.

Management accountant

_____ is the profit or loss a firm earns in the time period covered by the financial statement that reports the revenues and expenses.

Net income

Grengard Corp., a public relations firm, pays a hefty rent for its office space as it set up in on of the best commercial areas of London. In the given scenario, the rent paid by the firm for its office space is an example of _______?

Out-of-pocket costs

Maurice, the supervising manager of a telecommunications company, requires detailed information about the expenses that the company incurred from its monthly operations in the last fiscal year. In this scenario, Maurice should refer to the _______?

Profit and Loss Statement

Luke works in an accounting firm that offers services such as tax preparation and external auditing to corporate companies. Luke is currently providing consultation to a client that deals in automobile parts. In this scenario Luke is most likely a:

Public accountant

The management of an electronics company created an annual budget on a single assumed level of sales. This level of sales is to remain constant for the whole year. Later, the management finds it difficult to accurately measure the financial progress of the firm as the values in the estimated budget vary significantly from the actual sales. In the given scenario, the management most likely created a _________?

Static Budget

If an auditor doesn't find any problems with the way a firm's financial statements were prepared and presented, the report will offer a(n) _____ opinion.

Unqualified

The current liabilities of a company are reflected in the:

Wages owed to the workers for work that they have already completed.

Top-Down Budgeting is

When CEO's or Owners make a budget without input from managers or staff

The total assets of a dairy products manufacturing company are calculated. However, a sum of $5 million from the value of the company's property, plant, and equipment assets is not taken into account as the machinery is bound to become unusable after a certain period of time. In the context of balance sheets, the amount of $5 million that is subtracted from the original value of the total assets is called _____.

accumulated depreciation

In the context of balance sheets, resources owned by a firm are known as _____.

assets

Dylan is a supervisory manager in the production department of a tea manufacturing company. Each year, he actively participates in the budgeting process of the company. His input is valued by the top management as he is able to identify the issues in his department. In this scenario, it can be said that Dylan's company follows the _____ to budgeting.

bottom-up approach

To give the company's stockholders, creditors, and other external stakeholders an accurate idea of the company's overall performance, Rowensport Corporation, a multinational company, releases statements that contain details of the company's profits and losses over the past five years. In this scenario, the company is most likely involved in _____.

financial accounting

The Securities and Exchange Commission hires Tim to procure and analyze data on the state's tax revenues and expenditures to ensure that they are recorded and reported in accordance with regulations and requirements. In this case, Tim is most likely a(n) _____.

government accountant

In the accounting equation, assets are equal to:

liabilities plus owners' equity.