Exam 12: The Role of Accounting in Business

The purpose of accounting is to help employees.

Accountants communicate the meaning of _____ information and work with individuals and organizations to help them use that information to deal with business problems.

A classified balance sheet lists assets in order of _____.

The Code of Professional Ethics established by the American Institute of Certified Public Accountants states that accountants should be all of the following except

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.

Accountants do all of the following except _____.

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

An account receivable is recorded as a current asset.

Your balance sheet shows what your sales and expenses are.

Cash flows from _____ activities are derived from the day-to-day operations of your main line of business.

What is a certified management accountant, and how does one earn the title?

Explain the term account payable.

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. -Bakersfield works in management accounting.

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

Brenda Sinatra is senior analyst at a major Oregon accounting firm. One facet of her job is determining how much of each sales dollar is left after a client has covered certain costs. She’s also responsible for calculating how efficiently a client company’s assets are being managed. Another aspect of her job calls for measuring overall company performance and determining how effectively management is running the company. Finally, she reports on the firm’s financial strength to its board of directors. -The second aspect of Brenda's job involves profit margin ratios.

Your _____ statement shows your revenues and expenses.

Its _____ measures the number of times that a firm's operating income can cover its interest expense.

On a company's balance sheet,_____ reflects the amount that a business has charged as depreciation expense.

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

As a junior accountant for the Waterford Crystal Co. of New Bedford, Connecticut, you’ve just completed an intensive four-week initial training session. During your first week at Waterford, you’ll be applying many of the concepts that you worked so hard to understand over the course of four grueling years of college accounting classes: sales revenues, cost of goods sold, operating and administrative costs, taxes, interest expenses, and net profit. In week two, you’ll get some actual experience working with current and long-term assets, current and long-term liabilities, and owner’s equity. In your third week, you’ll be keeping track of all cash coming into and going out of the business. -During week one at Waterford, you'll be working with _____