Exam 17: Using Management and Accounting Information

The statement of financial position presents the business firm's assets, liabilities, and owners' equity accounts at the end of an accounting period, such as on December 31, whereas the income statement summarizes operations during a specified accounting period.

Describe the three activities of a statement of cash flows. Where does each section fall on the statement and what does it account for?

If total liabilities were subtracted from total assets, the residual value would be

While chief executives and financial officers are currently not subject to criminal penalties, they are required to certify periodic financial reports.

Verbal or numerical information presented in columns and rows is called a visual display.

The balance sheet is composed of

The ease with which an asset can be converted into cash is referred to as its

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 how data is transformed into financial information and, from that point, reported on various statements. 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 did not recognize the term "statement of financial position," Christine could use which of the following more common terms?

It is not necessary to audit a firm's financial statements if the firm has used generally accepted accounting principles.

The statement of cash flows for a business offers information on all of the following except

Net income is the profit earned (or the loss suffered) by a firm during an accounting period after the cost of goods sold and all expenses have been deducted from revenues.

All of the following are current assets except

Ruin Company's net sales for the period were $175,000. Its cost of goods sold was $85,000. What is this firm's gross profit on sales?

What is the correct order for the balance sheet?

The most liquid asset is

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?

Merchandise that has been sold and is returned to the firm by the customer is called

The ratio that averages about 2.0 for all industries is the

Numerical or verbal descriptions that usually result from measurements of some sort are known as

The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following about David's Spa and Salon is true?