Exam 8: Accounting: Decision Making by the Numbers

In the context of financial accounting, the external stakeholders of a firm:

In the context of budget preparation, the master budget of a firm organizes the _____ into a unified whole.

The management of a sugar manufacturing company sets aside a sum of $50,000 in its budget for the purchase of new machinery that would double the production. In the given scenario, the management is in the process of planning the _____ of the company.

Grydon Inc. has applied for a business loan in the United Bank. To best assess the loan case, the loan officer at the bank, Cerejo, decides to look at the company's net income. Cerejo will find this information in Grydon's _____.

In the context of balance sheets, what is the accounting equation? Define each of the elements in the accounting equation.

_____ is the profit or loss a firm earns in the time period covered by the financial statement that reports the revenues and expenses.

A pharmaceutical company wanted to create a budget that was practical and that would enable its managers to make more accurate comparisons between actual costs and budgeted costs. Thus, the company created a budget that was developed over a range of possible sales levels and was designed to show the appropriate budgeted level of costs for each different level of sales. Given this information, which of the following budgets did the company create?

Angela is part of the senior management of Fifian Inc., an event management company. She and with other members of the senior management plans the annual budget of the company. Angela, however, is not required to take inputs from or involve the middle and supervisory managers of the company in this planning process. In the given scenario, Fifian Inc. most likely uses _____.

In the context of budgeting, a flexible budget:

The preparation of operating budgets begins with the development of a(n) _____.

Janice is an accountant in a public relations firm. She prepares financial reports upon request by the management of the firm and does not stick to a predetermined schedule. The reports that she prepares mainly help the internal stakeholders of the firm. Given this information, it can be said that Janice performs _____.

Betty's job entails detecting problems such as embezzlement, waste, mismanagement, and employee theft at her organization. In this case, Betty is a(n) _____.

Chestelle Corporation, a sports equipment manufacturing company, borrows a considerable sum of money as loan from GRJ Bank, a private bank, at a time of financial crisis. The corporation has four years to repay the principal amount along with the interest to the bank. In this scenario, the money that Chestelle Corporation owes the bank represents its _____.

To give the company's stockholders, creditors, and other external stakeholders an accurate idea of the company's overall performance, Rowensport Corporation, a multinational company, releases statements that contain details of the company's profits and losses over the past five years. In this scenario, the company is most likely involved in _____.

In the context of balance sheets, accounts receivable is an example of _____.

In the context of franchises, the term accounts receivable refers to money owed to a parent company by franchisees who bought its goods on credit.

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Ginnie's, a candy manufacturing company, sees a sudden rise in the consumption of its kiwi-flavored candies. Thus, the company hires more labor and buys additional supplies to increase the production of these candies. In this scenario, the costs incurred by the company for purchasing these supplies and hiring more labor exemplify the company's _____.

The assets of Prosian Italia, a marble and granite company, amount to $400 million, and its liabilities add up to $180 million. Based on the accounting equation, Prosian Italia's owners' equity is equal to _____.

In the context of balance sheets, the accounting equation tells us that the value of a firm's assets must be: