Exam 12: The Role of Accounting in Business

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

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 -After calculating how efficiently the client's assets are being managed,Brenda must figure management effectiveness ratios.

When a business needs a more sophisticated balance sheet than the one created for its first accounting records,it creates a _____ balance sheet to list assets and liabilities in separate categories.

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

The difference between gross profit and operating expenses is _____.

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

Management effectiveness ratios measure overall company performance and show how successfully management is at running the business.

Management accounting furnishes information to individuals and groups both inside and outside the organization.

Accounting is a "people profession," not just a number-crunching business.

The inventory yield ratio measures a firm's efficiency in selling its inventory.

Although public accounting firms offer consulting and tax services,the hallmark of the profession is the performance of _____ audits.

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

The raft of corporate scandals that includes the notorious Enron episode was mainly the fault of _____.

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. -In preparing the company's income statement,you'll report on all of the following items except _____.

The Kathryn Lorillard Co.'s income after taxes is called _____ income.

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

_____ is/are the resources from which a company expects to gain some future benefit.

Its _____ ratio indicates that a company is making a reasonable profit on its sales even though its profitability is declining.

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 first part of Brenda's job requires her to deal with management efficiency ratios.

The principle of _____ explains that a company makes money when it sells inventory and that the faster it sells it,the more money it makes.