Exam 12: The Role of Accounting in Business

Your income statement shows how much cash you have coming in and going out.

All of the following appear in the financial statements prepared by accountants except _____.

A firm's chief accounting officer is called a(n) _____.

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. -Brenda probably deals with gross profit margin ratios but not with net profit margin ratios.

Companies that manufacture goods and hold onto them for a while before selling them and companies that buy goods and hold them temporarily for resale have created ______.

_____ is the difference between a company's revenues and all of its expenses.

We read in business publications that net income is often called the _____.

You're reading an article entitled _____, which explains how and why a business divides its fixed costs by its contribution margin per unit.

To find an inventory turnover ratio, you multiply ending inventory by Cost of goods sold.

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

What does interest coverage ratio report?

The difference between gross profit and operating expenses is _____.

Accounting is a _____ profession.

Profit margin ratios help a company assess its financial strengths.

You can calculate inventory turnover dividing cost of goods sold by _____.

Rather than record sales and purchases made on credit, your statement of _____ tells you where your cash came from and where it went.

Gross profit is the negative difference between revenues and the cost of goods sold.

_____ is another word for revenues.

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

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.