Exam 8: Accounting Records and Financial Statements

Ratio analysis is the most common form of financial analysis.

____ refers to what the business owes.

Double-entry accounting systems revolve around all but which of the following types of accounts?

____ are either full or partial estimates,since projections are being made as opposed to recording actual transactions.

The primary reason a small business needs adequate cash flow is to pay the bills incurred by the business.

All but which of the following are areas that small business owners should concentrate on when analyzing cash flow?

When Krispy Kreme was founded in 1937 by Vernon Rudolph,according to the chapter opening case,the doughnuts were initially produced to sell to

The cash-flow statement is a critical financial statement,often more important to the survival of a business than profit as reported on the income statement.

In the accounting equation,Assets = Liabilities + Revenue.

The financial record that summarizes the income and expenses of the business over time is the

At Wilson's Wash and Go,business managers ensure that all financial transactions are recorded in chronological order.These transactions are then classified by type.This example specifically involves which two areas of the accounting process?

An aging schedule that shows only the percentage of receivables for 0-30 days,31-60 days,61-90 days,and over 90 days is referred to as a/an

In Scenario 8-2 above,after analyzing the net profit margin,you determined that

The passage of the Sarbanes-Oxley Act of 2002 resulted in which of the following?

Each year,managers at Super Socks compare their current financial ratios with the numbers from the previous two years.This is referred to as what kind of analysis?

Which of the following ratios shows how far operating income can decline before the firm will have difficulties servicing its debt obligation?

The ratios used to measure a firm's ability to meet its short-term obligations to creditors as they come due are called

Compare and contrast leverage ratios and profitability ratios.

The ratios that measure the speed with which various accounts are converted into sales or cash and that are used to measure the efficiency of asset usage are known as

A small business owner should not use the cash basis if