Exam 12: The Role of Accounting in Business

The best way to prepare to be an investor is to learn all the _____ that you can.

Financial condition ratios tell you how efficiently your assets are being managed.

Fixed cost/contribution margin per unit equals a company's breakeven point in units.

The _____ ratio shows how much of each sales dollar is left after certain costs have been covered.

Although public accounting firms offer consulting and tax services, the hallmark of the profession is the performance of _____ audits.

If a company arranges to pay later rather than in cash for materials and other expenses, its accountant must set up accounts _____.

Management accounting furnishes information to individuals and groups both inside and outside the organization.

Long-term assets such as cars are also called fixed assets.

The debt owed by a business to an outside individual or organization is called its _____.

What is a depreciation expense? A long-term asset that will be used for several years-for example, a vehicle, machine, or building-appears on the balance sheet.Its cost is spread over its useful life-the number of years that it will be used.Its annual allocated cost appears on the income statement as a depreciation expense.

Scenario-Based Bakersfield, Smith, and Babble LLC is a midsized accounting firm in New England.In order to project an image as a full?service company, each partner specializes in a different field of accounting.Bakersfield provides information and analysis to business owners in order to help them operate their companies.Smith's job is to furnish information to individuals and groups both inside and outside organizations to help them assess their firms' financial performances.Babble is primarily responsible for preparing financial statements for business owners, managers, and investors and other users, such as creditors and government agencies. -Smith specializes in management accounting.

Often called management or corporate accountants, _____ accountants work either for a single company or government agency.

Accounting is a _____ profession.

You've just been assigned to prepare a ____ ratio analysis showing your company's ability to pay interest on its debts from its operating income.

Babble spends his time in financial accounting.

_____ is/are the resources from which a company expects to gain some future benefit.

Profit margin ratios help a company assess its financial strengths.

Explain breakeven analysis.

Your balance sheet is based on the _____ equation: Assets = Liabilities + Owner's equity.

_____ costs don't vary with quantity of goods sold.