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Busn 201 - Chap 14
Understanding Accounting Issues
| Question | Answer |
|---|---|
| What is bookkeeping? | The recording of accounting transactions. |
| Employees and unions use accounting information for? | To plan for benefits. |
| Financial accounting is? | The field of accounting concerned with external users of a company's financial information. |
| A current asset is? | An asset that can or will be converted to cash within the following year. |
| ________ is the amount of money owners would theoretically receive if they sold all of a firm's assets and paid all of its liabilities. | Owners Equity. |
| Money owed to creditors is a(n) | Liability. |
| What is the formula to calculate net income? | Gross profit minus operating expenses minus income taxes. |
| ________ is an asset that represents the cost of merchandise which was made or bought for sale to customers and that is still on hand. | Merchandise Inventory |
| ________ are non-physical assets, such as a patent or trademark, that have economic value in the form of expected benefits. | Intangible Assets. |
| Goodwill is? | The amount paid for an existing business above the value of its other assets. |
| Why do business managers use accounting? | To set goals, develop plans, set budgets and evaluate future prospects. |
| Employees and unions use accounting for? | Get paid and plan for benefits. |
| What is a controller? | An individual that manages all the firms accounting activities. |
| What are the three types of professional accountants? | CA, CGA and CMA (internal management acct) |
| What is the accounting equation? | Assets = Liabilities + Owners Equity |
| What are assets and liabilities? | Assets: Any economic resource that is expected to benefit a firm or an individual that owns it. Liabilities: A debt that the firm owns to an outside party. |
| What are the three basic financial statements? | Balance sheets, Income Statements, Statements of cash flows. |
| What does a balance sheet show? | Assets, liabilities and owner equity. |
| What does an income statement show? | Income statement/ profit and loss statement shows revenues - expenses = profits |
| What does a statement of cash flow show? | Use of cash during a given period. |
| What are the factors that arise in international accounting? | Foreign exchange rate, international accounting standards. |
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armigrrl