Quiz Ch 14 BA 1301
public accountants
Independent accountants whoserve organizations and individuals on a fee basis
current liabilities
accounts payable, notes payable, accrued expenses, taxes payable, current portion of long-term debt
_____ are bills that have accumulated and must be paid at a specified future date within the year although no bill has been received by the firm.
accured expenses
certified public accounta
an accountant whohas completed an approved bachelor's degree programand pass a test prepared by the American Institute ofCPAs (AICPA)
A(n) _____ is a yearly document that describes a firm's financial status and usually discusses a firm's financial activities during the past year and its prospects for the future.
annual report
Haley Optics manufactures lenses used in cameras, binoculars, and scientific equipment. It had sales of $300,000 during the last quarter. It depreciated assets during the year by $20,000. The Earnings before interest and taxes was calculated to be $120,000. On an income statement, an accountant would classify the remaining $160,000 as:
cost of goods sold
liquidity ratios
current ratio, acid test, net working capital
debt ratios
debt to equity
Sullins Cleaning Service has purchased a new pressure washer for $18,000. Sullins Cleaning is allowed to charge a portion of the company's cost during its useful life against the profits it generates. This practice is called:
depreciation
The acceptable turnover ratio is:
different for each industry
generally
ensure accuracy and consistency
Profitability ratios measure how well a firm uses its assets.
false
The $350 charged to the homeowner for electrical work performed one month ago is an example of a note receivable.
false
Managerial accounting provides all of the following financial information EXCEPT:
income statements
cloud based services
internet and cloud technology continueto disrupt many industries, including accounting
By dividing cost of goods sold by the average inventory to measure the speed with which inventory moves through the firm and is turned into sales, the _____ ratio is calculated.
inventory turnover
activity ratios
inventory turnover
For which of the following assets would a wholesale company use depreciation?
its warehouses
automations
manual gathering and inputting of informationcan be an inefficient and sometimes inaccurate process.
profitable ratios
net profit margin, return on equity, earnings per share
Which of the following is NOT really a financial ratio though it is often used to measure a firm's overall liquidity?
net working capital
What type of expense would be shown on an income statement when the owner of a dirt racing track promoted an upcoming race by purchasing advertising time on a local radio station?
operating
basic accounting procedures
- Developed in the late 15th century by an Italianmonk, Brother Luca Pacioli. - He defined three main accounting elements asassets, liabilities, and owners' equity - Assets−Liabilities=Owners' Equity - Computers changed how data is entered,organized and analyzed.
the income statement
- Income statement summarizes the firm's revenuesand expenses and shows its total profit or lossover a period of time. - Revenues - Expenses = profit(loss) - The tricks are in the definintions.
the balance sheet
- It is for a specific point in time. (end of month?) - Assets listed in order of Liquidity (close to cash) - Liabilities listed short term to long term - Owner's Equity is Assets - Liabilities
analyzing financial statements
- Ratio Analysis involves calculating and interpreting financial ratios using data taken from the firm's financial statements in order to assess its condition and performance
reshaping the accounting environment
- We focus on big-name scandals in the late 1990sand 2000s - An epidemic of accounting irregularities is alsotaking place in the wider corporate arena. - In 2002, the Sarbanes-Oxley Act (commonlyreferred to as SOX) went into effect - has anything really changed?
the statement of cash flows
- because cash is king - statement of cash flow, a summary of the money flowing into and out of a firm
trends in accounting
- cloud based services - automation -staffing challenges
current assets
Cash, Marketable securities, accountsreceivable, notes receivable, inventory
_____ is the process of distributing the original cost of a long-term asset over the years of its useful life.
Depreciation
private accountants
serve one particular organization
staffing challenges
the challenge of hiring the right staff to usethese new tools intensifies
accounting
the process of collecting, recording,classifying, summarizing, reporting, and analyzingfinancial activities.
All publicly held companies must include a statement of cash flows in their financial reports to stockholders.
true
The postage stamps and petty cash in the architect's drawer as well as his drawing table, his office furniture, and money owed to him by clients are all examples of assets.
true
