Exam 8: Accounting: Decision Making by the Numbers

Accounting systems are utilized by companies for several reasons, but they have little value when it comes to making economic decisions.

The major responsibilities of financial accounting is the preparation of the:

Describe the purpose of an income statement. Give the relevant equation and define each term in the equation.

Cash flows from _____ activities show the cash a firm received from issuing additional shares of its own stock.

Distinguish between financial accounting and managerial accounting.

Andy, who works as the Royston Corporation, is tasked with leading their external auditing project. He is also doing consulting work for Maynard Inc. Andy is an example of a(n) _____ accountant.

Achieving recognition as a certified public accountant is easy and does not require direct experience in the accounting field.

The balance sheet of Rover's Inc. shows its liabilities and owners' equity as $130,000 and $170,000 respectively. In this case, Rover's _____.

A firm's current liabilities:

Due to accounting scandals, many state accounting boards have imposed new ethics­related requirements.

As a shareholder of the Lindburgh Corporation, Lara wants to know whether the company earned a profit or loss during the past year. Lara can find this information in the company's _____.

Operating budget documents include the cash budget and the capital expenditure budget.

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) work together to find ways to make U.S. accounting practices more consistent with those in other nations.

Ted runs Green America, Inc., a nursery and landscape operation. His business flourishes during spring and early summer, but he makes most of his inventory purchases in the earlier winter. He needs to be extremely careful about cash flow fluctuations. In this case, the capital expenditure budget would be the most beneficial for Ted.

The _____ summarizes a firm's financial position at a specific point in time by listing its assets, liabilities, and owners' equity.

Benji works for a private firm that has been contracted to examine the books of accounts of the Sanborn Corporation. After she has checked the figures and examined the company's accounting methods, she is required to prepare a report on her findings. The work that Benji is tasked with is characteristic of a(n) _____.

_____ accountants work for local, state, and federal agencies to ensure that tax revenues are updated in accordance with regulations.

Congress passed the _____ of 2002 to combat widespread accounting malpractice.​

A master budget combines operational and financial budgets to represent a firm's overall plan of action for a specified time period.

_____ are also called explicit costs.