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Accounting

answer

a system for recognizing, organizing, anaylzing, and reporting info about the financial transactions that affect an organization

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Creditors

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typically require accounting info of a firm to evaluate its creditworthiness by analyzing the firms financial statements

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Why do stockholders typically want to view a firms accounting info?

answer

Because they're part owners

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As a management accountant:

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you work within an organization, prepare reports, and analyze financial info such as budgets and cost management

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Public accountants:

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Provide management consulting and external auditing services on a fee basis

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The balance sheet:

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summarizes a firms financial position at a specific point in time by listing its assets, liabilities, and owners equity

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Assets

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are valuable things owned by the firm

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What is the accounting equation?

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Assets+liabilities = owners equity

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Liabilities

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refer to the claims that stockholders have against their firms assets

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Income statement:

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indicates whether a firm earned a profit or suffered a loss over the past accounting period

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According to accrual basis accounting:

answer

method of accounting, revenues are recognized when they are earned, and payment is reasonably assured

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Net income is the difference between

answer

a firms revenue and its cost of goods sold

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Expenses

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refers to cash spent by a firm to carry out business activities and generate revenue

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What should CPA firms do to maintain their integrity while auditing a firm?

answer

Must be independent of the firm they audit

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The process of developing an operating budget begins with the development of a

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Sales budget

question

Managerial Accounting

answer

provides reports and analysis to senior level employees of a firm to assist them in making better informed business decisions

question

Finance

answer

the functional are of business that is responsible for finding, among many alternatives, the best sources of fund and the best ways to use them

question

Historically, the most widely accepted goal of financial management is to:

answer

maximize value of firm to its owners

question

Financial management:

answer

management of the firms working capital and the analysis of longterm invest opportunities

question

The degree of uncertainty related tot he actual outcome of a decision is a:

answer

Risk

question

financial managers use financial ratio analysis to:

answer

asses the financial strengths and weaknesses of their firm

question

Key numbers that financial managers use to calculate ratios usually come from the firms

answer

liquid asset

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Liqudity ratios:

answer

Ratios that measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year

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The average collection period

answer

measure how effectively a firm uses its assets to generate net income

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The debt to assets

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measures the extent to which a firm relies on debt to meet its financing needs

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Budgeted income statement

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used to develop a forecast of net income for the planning period of the firm

question

Budgeted balance sheet

answer

forecasts the types and amount of assets a firm will need to implement its future plans as well as the amount of additional financing the firm must arrange in order to acquire those assets

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Commercial paper

answer

short term, unsecured, promissory notes issued by financial institutions and other major corporations

question

Factor

answer

companies that provide short term financing to firms by purchasing their accounts receivables at a discount

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Spontaneous financing

answer

funds that arise during the natural course of a firms business operations without the need for special arrangements

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As a short term credit arrangement, banks sometimes extend revolving credit agreement, which are:

answer

guaranteed lines of credit in which the borrowing firm pays a commitment fee on the unused portions of the funds the bank has committed

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When a firm reinvests some of its net income rather than distributing it to owners, the result is an increase in the firms:

answer

returned earnings

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The purpose of a covenant is to:

answer

protect credits by preventing borrowers from pursuing policies that might undermine its ability to repay the loan

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Credit unions

answer

non-profit organizations owned by their depositors, which strive to pay higher interest rates on member deposits and charge lower interest rates on loans

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Securities dealer

answer

financial intermediaries who participate directly in securities markets, buying and selling stocks and bonds for their own account

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Dividneds to common stockholders are:

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right to receive of board of directors declares okay

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Stockholders receive capital gain if:

answer

the price of stock rises above the amount their paid for it

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Preemptive right of stockholders:

answer

if a corporation issues new stock, existing stock holders sometimes get first pick

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Right to residual claim on assets means that:

answer

if a company goes out of business, they have right to some assets if any left

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Capital gain

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when stockholders make money selling their shares, the stock goes up in price from what they bought it from

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Perfereed stockholders enjoy a preference over common stockholders with respect to:

answer

Claims on assets and payment of dividends

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Bond

answer

Formal IOU issued by a corporation or government entity

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Premium rate:

answer

When a bond is selling above the par value

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Discount rate:

answer

When a bond is selling below par value

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Maturity date

answer

exact date when bond reaches full value

question

Financial diversification

answer

practice of holding many different securities in many different sectors

question

Primary securities market

answer

corporations raise additional financial capital by issuing and selling new securities

question

Secondary securities market

answer

investors trade previously issued securities

question

An initial public offering (IPO):

answer

first time a corporation issues tock that may be purchased by general public

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Investment bank

answer

finanical intermediary that assists corporations when they issue new securities

question

Before going public, a firm must register with the:

answer

SEC

question

NYSE and NASDAQ

answer

two largest securities exchanges in the USA

question

Stock index

answer

allows investors to track general market conditions

question

When a business provide utility:

answer

satisfy customers wants and needs by providing goods and services at a convenient moment for customers

question

Marketing:

answer

an organizational function and s set of processes for creating, communicating, and delivering value to the customers and for managing customer relationships in ways that benefit the organization and the stakeholders

question

Form utility

answer

satisfies wants by convering inputs to a finished product

question

Production era

answer

customers didn't really matter, everything was produced the same

question

Selling era

answer

for first time, supply passed demand which caused hard sell

question

Marketing era

answer

flooded market with choices in almost every category, marketing concept developed to please customers.

question

Relationship era

answer

creating long term relationships with customers, most recent era

question

Value

answer

customers perception that a product has a better relationship between the cost and the benefits of that particular product than the products of the competitors

question

Marketing plan

answer

formal document to answer the question "who is your target market and how do you reach them?"

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Demographics

answer

Vital starting point for most marketers

question

Customers marketers

answer

direct their efforts toward people who are buying products for personal consumption

question

psychographic segmentation

answer

dividing customer into groups based on consumer attitudes, interests, values, and lifestyles

question

Marketing mix

answer

product, price, distribution, and promotion

question

Enviormental scanning

answer

process of continually collecting information format he external marketing enviorment

question

Customer behavior

answer

refers to how people act when buying goods and services for personal consumption

question

Two main approaches used in primary marketing research:

answer

secondary data and primary data

question

Survey research

answer

involves interaction with research subjects. the key advantage is that the marketer can secure information about what people are thinking and feeling

question

observation research

answer

no interactions directly between researcher and research subject

question

Creating products tailored for individuals on a mass basis is referred to as:

answer

mass cusomization

question

Actual product

answer

the physical good or delivered service that provide a core benefit

question

Licenesing

answer

involves purchasing the right to use another companies brand name or symbol

question

Cannibalization

answer

occurs when a new product line "eats" the sales of an existing line

question

Product line

answer

group of products that are closely related to each other, in terms sod either how they work or the customers they serve

question

Installations

answer

are large capital purchases designed for a long, productive life. their marketing emphasizes personal selling and customization

question

Product quality

answer

relates directly to product value, which comes from understanding a customer

question

Manufactuers brands

answer

brands that a producer owns and markets

question

Product life cycle

answer

theoretical model that includes the stages of introduction, growth, maturity, and decline

question

Product placement

answer

paid integration of branded products in movies and on television

question

Advertising

answer

paid, non personal communication designed to influence a target audience with regard to a product, service, organization, or idea

question

Sponsoship

answer

The combination of communication tools that a firm chooses to advertise their products

question

Premiums

answer

items consumers receive free of charge in return for making a purchase

question

Physical distribution

answer

the actual movement of products along a channel of distribution

question

Goal of distribution strategy:

answer

getting the right product to the right person at the right time at the right place at the right time

question

Two key elements of distribution strategy:

answer

channels of distribution and physical distribution

question

Supply chain management

answer

planning and coordinating the flow of goods from the raw materials to the final consumers

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