Exam 15: Using Accounting Information

The debts of a business that will be paid in one year or less are called its _____.

For all businesses, the desired acid-test ratio is _____.

If the assets of Martin's Pet Store are $107,000 and the owners' equity is $75,000, which of the following is a correct statement?

Managerial accounting generates financial statements and reports for interested people outside an organization.

The most liquid asset is _____.

The ratio that averages about 2.0 for all industries is the _____.

All of the following except which are classified as fixed assets?

The process of transferring information from the journal to the general ledger is known as transposition.

The current ratio is calculated by dividing

Television sets that Best Buy owns for selling to its customers are classified as _____.

The ending cash balance reported on the statement of cash flows is the same as the net sales amount reported on the firm's income statement.

Selling expenses are considered to be a type of _____.

All of the following except which are current assets?

Tom has successfully completed the first three steps in the typical accounting cycle.However, because the ____ totals are incorrect, Tom cannot proceed to prepare the financial statements.

Dividing current assets by current liabilities gives the current ratio.

Christine's First Job Christine has just earned her undergraduate degree in accounting and has successfully completed the CPA exam.She recently interviewed with a relatively small and new company and was offered a job.The offer sounded very promising; the job had opportunities to grow with the company and provided diverse challenges.Christine accepted the job. Once Christine started working, she realized that the owners and employees did not have a general understanding of accounting.She had to teach them the steps in an accounting cycle so they would be able to understand how she was going to create reports.When she talked about the statement of financial position, they had no idea what she was talking about.She was the qualified individual responsible for accounting.No one else working with her had much knowledge.They did not even know the different financial ratios that someone could use to understand the financial standing of a company.Christine knows it will be a challenge to keep everyone on the same page when it comes to numbers and reports. -Refer to Christine's First Job.If the owners were interested in obtaining their working capital figures, Christine should do which of the following?

The Dress Barn offered its customers a reduction in price on some clothing items that were slightly faded from being in the window at the front of the store.This reduction is called a _____.

What type of information is reported on a corporation's statement of cash flows?

A sheet-metal manufacturer is interested in the financial statements of General Motors because, as a(n) ____, the metal manufacturer will provide sheet metal to General Motors for further processing.The sheet metal manufacturer is concerned with establishing its credit policies for General Motors.

All American National Company earned $240,000 last year.The board of directors decided to pay out one-half of the firm's earnings to the stockholders.Before the board's decision, the firm's retained earnings were $740,000.Which of the following statements is true?