Exam 15: Understanding Accounting and Financial Statements

On a balance sheet,total assets must always equal the sum of liabilities and owners' equity.

Daniel wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues,operating expenses,and cash receipts and disbursements.Daniel wants to create a(n)________.

All of the following are liabilities EXCEPT ________.

If a company has an acid test ratio of 1.00,$5 million in inventory,and $10 million in current liabilities,what are its total current assets?

Miles is an accountant and works for a firm that provides tax planning and preparation services to other businesses.Miles is a management accountant.

Monica is involved in obtaining new funds to run and expand the business.She is engaged in an investing activity.

Jenna asked her accountant to prepare a summary of the company's "bottom line." What specific information is Jenna interested in?

A firm's balance sheet shows its financial position over a period of time.

Emilio is not an employee of the Modesto Corporation,but was hired as a management consultant to provide unbiased advice about Modesto's financial condition.Emilio is a(n)________.

A(n)_____ demonstrates his or her accounting knowledge by meeting provincial requirements for education and experience,as well as successfully completing a number of rigorous tests in accounting theory and practice,auditing,law,finance,strategy,and taxation.

The natural progression of a business begins with ________.

Sri manages the sales force for his company.He is engaged in the ________ activity.

________ activities provide the necessary funds to start a business and to expand it after it begins operations.

Assets are shown in descending order of liquidity.

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank.The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

The Ming Company sells $1,000 worth of goods on July 25 on credit.The customer sends the company a check on August 15.The customer receives the goods on September 1.Assuming the company uses accrual accounting,the sale will be recorded in ________.

Last year,a firm had a current ratio of 2.0 and an acid-test ratio of 1.0.This year the firm's current ratio is 2.5 and its acid-test ratio is 1.5.This firm's ________ has ________.

A firm has total assets of $50 million and owner's equity of $40 million.What is the firm's debt ratio?

Makayla is a corporate CPA working on a new budget.When she lists the company's liabilities,which of the following will she include?

A budget is essentially a long-term financial plan.