question

annual report

answer

an audited document required by the SEC containing financial information and provided to shareholders at the end of the year

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bonds payable

answer

long-term debt owed by a company to investors who have purchased bonds

question

depreciation

answer

noncash expense that reduces the value of an asset over a prescribed period of time due to wear and tear, age or obsolescence

question

income statement

answer

a financial statement that summarizes a firm's performance and indicates the profitability (or loss) over a period of time

question

intangibale assets

answer

non-monetary assets that cannot be seen, touched or physically measured

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notes payable

answer

short- or long-term obligations to banks or other creditors based on formal written agreements

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operating expenses

answer

expenses incurred as a result of normal buciness activities in an organization, but not directly associated with production

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retained earnings

answer

earnings reinvested in the business or used to pay off debt

question

accounting cycle

answer

a sequence of procedures repeated in the same order from the point of the transaction to its appearance in the financial statements

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accounts payable

answer

money owed by a company to its suppliers and/or vendors for products or services purchased on credit

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balance sheet

answer

financial statement that shows the financial position of a company on a specific date

question

cost of goods

answer

the costs of obtaining raw materials and all parts involved in producing the finished goods sold to consumers

question

gross profit

answer

the difference between revenue from the sale of goods and the costs related to producing those goods

question

ledger

answer

the accounting book in which transactions are listed in separate accounts

question

liabilities

answer

a company's debts or obligations that come about during the course of business operations

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revenue

answer

the income a company receives from its main business activities during a specific period of time

question

cash flow

answer

a measure of a company's financial health found by calculating the difference between cash receipts and cash payments

question

current assets

answer

a balance sheet account combining assets that are expected to be converted to cash within a year

question

double-entry

answer

an accounting technique that records financial information as both a debit and a credit

question

fixed assets

answer

tangible propery that a firm owns and does not convert quickly into cash

question

independent audit

answer

an examination of a firm's financial statements done by a certified public accountant (CPA) who is not an empoyee of the firm

question

liquidity

answer

the ability of an asset to be converted into cash quickly without any impact on the price of the asset

question

managerial accounting

answer

the branch of accounting that measure, analyzes and communicates information about a company's operations to internal managers to aid their decision making

question

trial balance

answer

an informal accounting schedule that lists general eldger account balances at a point in time

question

accounting

answer

the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested partis the information they need to make good decisions

question

assets

answer

economic resources (things of value) owned by a firm

question

auditing

answer

the job of reviewing and evaluating the information used to prepare a company's financial statements

question

bookkeeping

answer

the recording of business transactions

question

certified internal auditor (CIA)

answer

an accountant who has a bachelor's degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors

question

certified management accountant (CMA)

answer

a professional accountant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accountants

question

certified public accountants (CPA)

answer

an accountant who passea a series of examinations established by the American Institute of Certified Public Accountants (AICPA)

question

cost of goods sold

answer

a measure of the cost of merchandise sold or cost of raw materials and supplies for producing items for resale

question

financial accounting

answer

accounting information and analyses prepared for people outside the organization

question

financial statement

answer

a summary of all the transactions that have occurred over a particular period

question

fundamental accounting equation

answer

assets = liabilities + owners' equity; this is the basis for the balance sheet

question

government and not-for-profit accounting

answer

accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget

question

journal

answer

the record book or computer program where accounting data are first entered

question

net income or net loss

answer

revenue left over after all costs and expenses, including taxes, are paid

question

owners' equity

answer

the amount of the business that belongs to the owners minus any liabilities owned by the business

question

private accountant

answer

an accountant who works for a single firm, government agency, or nonprofit organization

question

public accountant

answer

an accountant who provides accounting services to individuals or businesses on a fee basis

question

ratio analysis

answer

the assessment of a firm's financial condition using calculations and interpretations of financial ratios developed from the firm's financial statements

question

statement of cash flows

answer

financial statement that reports cash receipts and disbursement related to a firm's three major activities: operations, investments, and financing

question

tax accountant

answer

an accountant trained in ta law and responsible for preparing tax returns or developing tax strategies

question

balance sheet list

answer

accounts receivable, land, patents, long-term liabilities, owner's equity

question

income statement list

answer

revenues, costs of goods sold, advertising expense, insurance expense, income tax

question

statement of cash flow list

answer

net change in cash, cash balance

question

(1) analyze source documents

answer

separate purchasing receipts from sales documents

question

(2) record transactions in journals

answer

record financial data

question

(3) transfer journal entries to ledger

answer

post individual transactions into a single account

question

(4) take atrial balance

answer

summarize data in the ledgers

question

(5) prepare the financial statements

answer

prepare income statement

question

(6) analyze financial statements

answer

evaluate profit/loss of the firm

Business MGMT Chapter 17 – Flashcards

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