Exam 13: Understanding Financial Statements and Forecasting

A company's controller is reviewing the firm's total revenues less total costs between Jan.1 and June 30.Which financial statement is the controller reviewing?

Which of the following shows all cash receipts and payments involved in operating the business and managing its financial activities?

An owner of an antique shop sold a dining room set from the 1800s.He is not quite sure if he made a profit.What accounting information does he need to verify to determine if a profit was made?

A company's president arranges a business loan with the bank to help the company expand into overseas markets rather than selling common shares.Which term applies to the arrangement made with the bank?

Which of the following is an intangible asset?

A firm that has positive profits can still be running out of cash.

A cash budget that compares actual expenditures with budgeted expenditures is a feature that is available on most computer software packages.

Which of the following immediately affects cash flow?

Define the income statement and provide a general overview of its construction.

What should an accounting system accomplish?

A company's bank would like information about the amount of money owed to creditors.Which financial statement will the company give to the bank?

Current ratio is a measure of the company's relative debt,determined by multiplying current assets by current liabilities.

A company has revenues of $700,000; invested capital of $3,000,000; total debt of $ 1,500,000 of which it pays 2.5% interest; current,long-term,and other assets totalling $4,000,000; and total expenses of $550,000.What is the company's debt ratio?

A mortgage is a long-term loan from a creditor for which real estate is pledged as collateral.

The balance sheet shows a firm's assets,liabilities,and owners' equity at a specific point in time.

Kareece is planning to open a salon and wants to make sure she manages the company costs and cash well to increase its profitability.What should Kareece first do during this stage of the company's development?

The board of directors for a corporation votes that a portion of the year's profits should be distributed to the owners of the company.What is this payment to the owners called?

Entrepreneurs should aim to minimize and control,rather than maximize and own,resources.

A company has current assets of $250,000,current liabilities of $180,000,cash of $70,000,and a mortgage at the bank for $150,000 cash.What is the company's current ratio?

A business owner is reviewing her company's cash balance to determine if she has enough to pay the outstanding past three months' rent.What is the accounting term for this unpaid rent?