Exam 12: The Role of Accounting in Business

To help them operate the business, _____ accounting provides information and analysis to decision makers inside the organization.

Accounting consists of measuring and summarizing business activities.

Explain the term account payable.

Working in the field of _____ accounting, John Bates furnishes information to individuals and groups both inside and outside his organization to help them assess the firm's financial performance.

Your income statement shows how much cash you have coming in and going out.

A business that has perishable goods will have high inventory turnover.

Contribution margin per unit is the shortage of revenue per unit over variable cost per unit.

Auditors find _____ especially useful because it reveals the relationship of each item on the income statement to a specified base.

Public accounting firms offer consulting and tax services, the hallmark of the profession being the performance of internal audits.

Calvin's Calendar Company has assets of $75,000 and liabilities of $15,000.How much is Calvin's owner equity?

A company can assess its financial strengths by analyzing its _____ ratios.

The last thing that Brenda does is report on financial condition ratios.

A ratio analysis is a technique for financial comparison that shows the relationship between two numbers.

In order to find the difference between a company's cash inflow from operating activities and its cash inflow from investing activities, you would examine its balance sheet.

Its _____ ratio may tell us that a company generated an excellent return on assets in its first year and a good return in its second year.

When a business needs a more sophisticated balance sheet than the one created for its first accounting records, it creates a _____ balance sheet to list assets and liabilities in separate categories.

Gross profit is the money that a company has earned after paying all its expenses.

_____ is another word for revenues.

This past year Donald's Duck Farm had revenues of $25,000.The company spent $1,000 per month on duck eggs and $700 per month on feed, rent, and utilities to keep incubators running.What was Donald's net income?

To determine a company's interest coverage, you divide its operating income by its _____.