Exam 12: The Role of Accounting in Business

Your _____ shows the amount of cash that you have coming in and going out.

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 same thing as the item called net profit on an income statement.

Your _____ statement shows your revenues and expenses.

Bakersfield, Smith, and Babble LLC is a midsized accounting firm in New England. In order to project an image as a full service company, each partner specializes in a different field of accounting. Bakersfield provides information and analysis to business owners in order to help them operate their companies. Smith’s job is to furnish information to individuals and groups both inside and outside organizations to help them assess their firms’ financial performances. Babble is primarily responsible for preparing financial statements for business owners, managers, and investors and other users, such as creditors and government agencies. -Given the nature of their firm,none of these accountants would have much daily use for GAAP (generally accepted accounting principles).

Long-term assets such as cars are also called fixed assets.

In order to find the difference between a company's cash inflow from operating activities and its cash inflow from investing activities,you would examine its balance sheet.

Its fiscal year is a company's designated business year.

Its debt-to-equity ratio shows the risk entailed by a company's capital structure.

A merchandiser is a company that makes a profit by selling goods.

Its statement of cash flows tells a business only where its cash was spent.

Expenses are divided into two categories-cost of goods sold and operating expenses.

Fixed cost/contribution margin per unit equals a company's breakeven point in units.

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

The debt owed by a business to an outside individual or organization is called its _____.

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

Bakersfield, Smith, and Babble LLC is a midsized accounting firm in New England. In order to project an image as a full service company, each partner specializes in a different field of accounting. Bakersfield provides information and analysis to business owners in order to help them operate their companies. Smith’s job is to furnish information to individuals and groups both inside and outside organizations to help them assess their firms’ financial performances. Babble is primarily responsible for preparing financial statements for business owners, managers, and investors and other users, such as creditors and government agencies. -Government agencies would have little interest in the kind of information supplied by this firm.

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.

Accountants find the money that a company needs to operate.

A company's balance sheet reports its owner's equity.