Exam 15: Understanding Accounting and Financial Statements

Nicole is the Executive Director of a local food bank and is assessing the financial situation of her not-for-profit organization.Nicole uses a(n)_____ to determine whether revenues from contributions and other sources will cover operating costs.

Which of the following current assets is NOT included when calculating the acid-test ratio?

A(n)________ of a business is anything owed to creditors-that is,the claims of a company's creditors.

Astrid works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Astrid's job?

A debt ratio of 20% means that the firm is relying more on borrowed money than owners' equity.

If Simone Enterprises has a debt ratio of 40%,it means that for every $1 in _____,the firm has 40 cents in _____.

Benicio is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Benicio is most interested in using this information

Ratios assist managers by interpreting actual performance and making comparisons with what should have happened.

Gus is an accountant and works for a firm that provides tax planning and preparation services to other businesses.Gus is a management accountant.

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are known as

Yashmi is involved in obtaining new funds to run and expand the business.She is engaged in an investing activity.

Carmen works as a tax accountant at a mid-sized manufacturing company.Carmen would be considered a

To provide reliable,consistent,and unbiased information to decision makers,accountants follow guidelines,or standards,known as

Which of the following was established in 1973 to promote worldwide consistency in financial reporting practices?

A firm has $15 million in assets and $5 million in owner's equity.Therefore,the firm must also have $15 million in liabilities.

All of the following are profitability ratios EXCEPT

On a balance sheet,total assets must always equal the sum of liabilities and owners' equity.

An accountant employed by a business other than an accounting firm is called a management accountant.

Elsa owns a business and is reviewing her company's current financial statements.As a user of accounting information,Elsa is most interested in using this information to

Accounting information can be as important to those outside the organization as it is to those inside the organization.