Exam 17: Understanding Accounting and Financial Information

During a period of rising prices, using FIFO (first-in, first-out) inventory valuation method will result in ________ net income figures than would LIFO (last-in, first-out).

The value of resources the firm owns, minus the amount of money the firm owes to others =

Referring to an accounting system, inputs refers to events and transactions that occur within the business, while outputs refers to the journal entries and ledger categorization that occurs after the events and transactions are recorded.

FIFO and LIFO are two common methods used to compute the depreciation of tangible assets.

The books where accounting data are first entered are called ledgers.

A hospital emergency room serves several patients from a ten-car pile-up on the local interstate. Most of the victims require bandages, antibiotics, foot and arm casts, topical ointments, and pain pills. These items are part of the costs of goods sold for the hospital emergency room.

Net profit refers to

The work of a certified management accountant is intended to enable people outside of the organization to make investment decisions.

Debts that are due in one year or less are classified on the balance sheet as

Coolest Closet, a chain of retail clothing stores, wants to assure investors and other outsiders that its financial statements are accurate. One way to do so would be to hire a public accounting firm to

_______ refers to the value that stockholders or owners have in a company.

In the course of their jobs, bookkeepers

The key financial statements are the balance sheet, the income statement, and the statement of cash flows.

Portable Pet Care, Inc., has recorded the following on its income statement for the period ending December 31, 2019: The return on sales = 34%. This return is outstanding and there is no need to compare this return to competitors in the veterinary services industry.

A balance sheet lists assets in order of their ________.

Good decisions are based on good information. Organizations need accounting-to provide good financial information.

The firm's most valuable assets are listed at the top of its balance sheet.

Brand names such as Coca-Cola and McDonald's are examples of intangible assets.

Sally prepares monthly financial statements for her client, Dent's Auto Body. Now, though, she must summarize the data in the accounting ledgers to determine if the figures are correct and balanced. Sally will prepare a statement of cash flows in order to complete this step of the cycle.

The current ratio is a good indicator of the degree to which a firm relies on borrowed funds in its operations.