Exam 13: Small Business Accounting: Projecting and Evaluating Performance

Expendables are often fixed costs.

Which of the following statements is true about fixed costs?

What are some of the limitations of a balance sheet?

"_____" means that the value of the item can be realized,or must be paid as cash within one year,while "_____" means that the asset will still be valuable more than one year in the future,or that the business may take longer than one year to pay the amount owed.

Which of the following ratios is used to estimate the liquidity of a firm?

There are two formats for income statements: revenue-only format and,revenue and expense format.

Is accounting important to small businesses? Explain.

Differentiate between income statement and balance sheet.

Financial accounting is forward-looking and attempts to predict the results of management decisions.

The first step in budgeting is to make a forecast of your future profits.

_____ is the most used item on the income statement.

Describe the mechanics of a cash flow statement.

Cash flow statements can be either direct statements or indirect statements.

Going concern is the

_____ is an indicator of the business's ability to manage cash flows so that the company has the financial ability to respond appropriately if an unexpected opportunity or problem arises.

Which of these is NOT a common financial statement?

What are some of the tasks an accounting system should be able to perform in order to ensure that a business's accounting information is accurate,reliable,and useful?

Which of these is used by managers for planning and controlling?

The _____ budget shows the number of units that are expected to be acquired during the budget period.

Variable costs decrease if output increases.