Exam 12: The Role of Accounting in Business

The inventory yield ratio measures a firm's efficiency in selling its inventory.

Interest coverage equals interest expense divided by operating income.

During week one at Waterford, you'll be working with _____.

Accountants communicate the meaning of _____ information and work with individuals and organizations to help them use that information to deal with business problems.

_____ is the selling price per unit minus the variable cost per unit.

The relationship between funds acquired from creditors and funds invested by owners is called principal structure.

A more sophisticated kind of balance sheet is called a classified balance sheet.

_____ analysis expresses each item on the income statement as a percentage of a specified base (usually sales).

Its fiscal year is a company's designated business year.

Which of the following groups is typically interested in financial accounting information?

A current loan is due in two years.

Scenario-Based As a junior accountant for the Waterford Crystal Co.of New Bedford, Connecticut, you've just completed an intensive four-week initial training session.During your first week at Waterford, you'll be applying many of the concepts that you worked so hard to understand over the course of four grueling years of college accounting classes: sales revenues, cost of goods sold, operating and administrative costs, taxes, interest expenses, and net profit.In week two, you'll get some actual experience working with current and long-term assets, current and long-term liabilities, and owner's equity.In your third week, you'll be keeping track of all cash coming into and going out of the business. -During your third week at Waterford, you'll be working with _____.

_____ is the same thing as the item called net profit on an income statement.

A merchandiser is a company that makes a profit by selling goods.

The raft of corporate scandals that includes the notorious Enron episode was mainly the fault of _____.

_____, which supply relevant, accurate, timely information in a format that will aid them in making decisions, are tailored to the needs of individual managers.

The second aspect of Brenda's job involves profit margin ratios.

When you sell goods, you generate a _____ profit.

Given the nature of their firm, none of these accountants would have much daily use for GAAP (generally accepted accounting principles).

Its statement of cash flows tells a business only where its cash was spent.