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Exam 12: The Role of Accounting in Business

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Question 71

Multiple Choice

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Accountants communicate the meaning of _____ information and work with individuals and organizations to help them use that information to deal with business problems.

A) financial
B) investment
C) managerial
D) bookkeeping

E) None of the above
F) A) and D)

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Question 72

Multiple Choice

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Your _____ shows organizational sales, expenses, and profit.

A) balance sheet
B) income statement
C) statement of cash flows
D) returns summary

E) None of the above
F) A) and B)

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Question 73

Multiple Choice

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_____ is/are the resources from which a company expects to gain some future benefit.

The annual allocation of the cost of a long-term asset is recorded as a(n) _____.

Your balance sheet is based on the _____ equation: Assets = Liabilities + Owner's equity.

What two items does an income statement show

Its _____ ratio examines the relationship between funds acquired from creditors and funds invested by owners.

Define gross profit and net income.

A firm can measure its overall performance and find out how successfully it's being run by analyzing its _____ ratio.

SCENARIO-BASED As a junior accountant for the Waterford Crystal Co. of New Bedford, Connecticut, you’ve just completed an intensive four-week initial training session. During your first week at Waterford, you’ll be applying many of the concepts that you worked so hard to understand over the course of four grueling years of college accounting classes: sales revenues, cost of goods sold, operating and administrative costs, taxes, interest expenses, and net profit. In week two, you’ll get some actual experience working with current and long-term assets, current and long-term liabilities, and owner’s equity. In your third week, you’ll be keeping track of all cash coming into and going out of the business. -During week one at Waterford, you'll be working with _____

In order to examine a firm's capital structure, you would look at its debt debt-to-equity ratio.

Cash flows from _____ activities are derived from the day-to-day operations of your main line of business.

A firm's chief accounting officer is called a(n) _____.

The relationship between funds acquired from creditors and funds invested by owners is called principal structure.

To calculate a firm's current ratio, you divide its current assets divided by its _____.

An account receivable is recorded as a current asset.

_____, which supply relevant, accurate, timely information in a format that will aid them in making decisions, are tailored to the needs of individual managers.

You're reading an article entitled _____, which explains how and why a business divides its fixed costs by its contribution margin per unit.

Interest coverage measures the number of times that a firm's operating income can cover its interest expense.

You've just been assigned to prepare a ____ ratio analysis showing your company's ability to pay interest on its debts from its operating income.