Exam 8: Accounting: Decision Making by the Numbers

Managerial accounting involves developing standardized reports according to a predetermined schedule.

Ralph owns stock in the Ranklin Corporation and wants to know whether the company earned a profit over the most recent quarter. This information would be available in the company's balance sheet.

The _____ identifies a firm's sources and uses of money in a given accounting period based on the firm's operating, investing, and financing activities.

Cash flows from operational activities show any cash used to buy fixed assets and long­term financial investments.

Shelly is a loan officer who approves loans for small businesses. One factor she looks at carefully when making loan decisions is the amount of outstanding debt the firm already has. She can find this information by looking at the firm's:

Management accountants and public accountants do the same type of work but have different qualifications.

_____ are valuable things owned by the firm.

Using comparative statements to identify changes in key account values over time is called _____.

_____ refers to increases in a firm's assets that result from the sale of goods, provision of services, or other activities intended to earn income.

Which of the following best describes managerial accounting?

Kale Inc. uses accrual­basis accounting. It can be said that Kale's revenue initially reflects as an increase in accounts receivable instead of an increase in cash.

Some key users of an organization's accounting information include managers, government agencies, and stockholders.

According to the accounting equation, the value of a firm's assets should be less than the financing provided by the creditors and the owners of the firm.

The accounting department at Cathy's Cupcakes has been asked to determine the company's direct costs. In this scenario, the accountants will look at what the company spent on baking supplies, muffin pans, and counter assistance.

Bryan, an external auditor, finds minor problems in a company's financial report but is of the view that it is an unbiased and precise version of the company's financial status. He is likely to issue an adverse opinion to the company.

Stockholders sometimes refer to accounting information as the "language of business" because they rely heavily on financial information for progress.

In the statement of retained earnings, the change in retained earnings is found by subtracting dividends paid to shareholders from net income.

Discuss the two main financial budget documents.

Which of the following must always be equal to each other in a balance sheet?

Explicit, implicit, fixed, and variable are the different forms of costs commonly used by managerial accountants.