Exam 16: Understanding Accounting and Financial Information

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Citizens and special interest groups often have interest in the information generated by government accounting.

Financial accountants prepare reports for owners,creditors,suppliers,and others outside of the organization.

Gross margin represents the amount a firm earns by buying (or making)and selling merchandise.

Jim works in the accounting department at the Brunswick Sunflower Corporation,where it is his job to record all transactions into journals.After completing this task,the next step in the accounting process is to:

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

The cash flow statement shows a firm's revenues,costs of goods sold,expenses,and net income.

Carlisle Communications is preparing its cash flow statement.Among other things,this statement will show:

is the dollar value of what is received for goods sold,services rendered,and money received from other financial sources.

The preparation of financial statements for people outside the firm (creditors,unions,suppliers,and others)is the goal of:

One of the most important performance ratios is what?

As Hector was packing to return to Simon Fraser University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,stereo system,and DVD player.An accountant would list all of these as Hector's:

Return on equity divides ____ by _.

Expenses a firm incurs for insurance,office salaries,and rent would be classified as:

Computerized accounting programs have eliminated the need to prepare a trial balance.

In large companies,certified internal auditors are usually responsible for preparing tax returns and developing tax strategies for businesses.

Revenues,cost of goods,and expenses would all be reported on a firm's income statement.

The purpose of liquidity ratios is to indicate the degree to which a firm relies on borrowed funds in its operations.

The accounting book that provides all the information about a single account in one place is called the ledger.

The basic earnings per share ratio does not take what into account?