Exam 12: The Role of Accounting in Business

Breakeven analysis is a method of determining the level of sales at which a company will have no profit or loss.

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.

The difference between your sales and your cost of goods sold is known as your _____.

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

If you buy something with the intent to pay later rather than in cash, the seller will set up an account _____.

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

To find out the relationship between assets that can be converted to cash within a year and liabilities that will be paid within a year, you can look up Zanzibar Corp.'s _____ ratio in its annual report.

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

Management effectiveness ratios measure overall company performance and show how successfully management is at running the business.

Vertical percentage analysis expresses each item on an income statement as a percentage of a certain base.

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. -Government agencies would have little interest in the kind of information supplied by this firm.

_____ shows when your total sales revenues exactly equal your expenses.

Business student Maurice Langdon can use _____ analysis to show the relationship between two numbers.

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

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

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

Your balance sheet shows what your sales and expenses are.

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

_____ is another word for revenues.