Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

intro to business test 3 > chapter 16 > Flashcards

chapter 16 Flashcards

1
Q

what is accounting?

A

the recording, classifying, summarizing & interpreting of financial transactions & events.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is recording?

A

entries are made into journals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what is classifying?

A

the effects of these journal entries are transferred or posted into ledgers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what are the parts to processing?

A

recording, classifying and summarizing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what are the inputs in the accounting system?

A

accounting documents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are the outputs of the accounting system?

A

financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what do financial reports pinpoint?

A

problems/opportunities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what do investors, suppliers and creditors do in accounting?

A

provides a means to analyze business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

what does the government do in accounting?

A

assist with tax collection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what are the five key working areas in accounting?

A
  1. managerial accounting
  2. financial accounting
  3. compliance (auditing)
  4. tax accounting
  5. governmental & not-for-profit accounting
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what is managerial accounting?

A

analyzing financial information to managers for the pursuit of an organization’s goals.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is managerial accounting concerned with?

A

measuring & reporting costs of production & marketing, & planning & preparing budgets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is financial accounting?

A

generates information & analyses for people outside the organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

in financial accounting where does information go to?

A

owners & prospective owners, creditors & lenders, employee unions, customers, suppliers, government agencies & general public.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is an annual report?

A

A yearly statement of the financial condition, progress & expectations of an organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

how do users keep more current?

A

Various quarterly reports (every 3 months)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

are these reports required by law?

A

yes for shareholders of public corporations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what are private accountants?

A

work for a single firm, government agency, or non-profit organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

if companies do not need a full time accountant, who do they hire?

A

they hire independent public accounting firms to maintain their financial records.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what is a public accountant?

A

An accountant who provides services to businesses on a fee basis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is auditing?

A

Reviewing & evaluating records used to prepare a company’s financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

who are audits required for?

A

all public corporations in Canada whose shares are traded in a public stock exchange.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what is compliance?

A

Job of reviewing & evaluating records used to prepare a company’s financial statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

what is the most important function and income generator for public accounting firms?

A

performing independent audits (examinations) of books & financial statements of companies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

what is an independent audit?

A

an evaluation & unbiased opinion about accuracy of a company’s financial statements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

who requires tax returns to be submitted

A

Federal & provincial governments require submission of tax returns that must be filed at specific times & in a precise format.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

where is tax accounting trained and what is it resposnsible for?

A

Tax accountant is trained in tax law & is responsible for preparing tax returns or developing tax strategies (figuring out how to pay less tax)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

who are the primary users of government accounting?

A

citizens, special interest groups, legislative bodies & creditors, want to make sure that the gvt is fulfilling its obligations and making proper use of taxpayers money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

why do not for profit organizations have a growing need for trained accountants?

A

since contributors to non-profits want to see exactly how & where funds they contribute are being spent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

what is a chartered accountant?

A

ccountant who has met examination, education & experience requirements of Canadian Institute of Chartered Accountants (CICA).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

what is a certfiieded management accountant?

A

accountant who has met examination, education & experience requirements of Society of Management Accountants of Canada.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

what is a certified general accountant?

A

accountant who has met examination, education & experience requirements of Certified General Accountants Association of Canada.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

how was the CPA formed?

A

formed by integration of 3 organizations: CICA, CMA- Canada & CGA-Canada.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

what is the CPA designation?

A

an internationally recognized Canadian accounting designation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

where does the CPA designation emerge from?

A

Emerged from belief that Canada needed a single, unified accounting profession to unify Canadian provincial accounting bodies at the national level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

what are the steps in the accounting cycle?

A
  1. analyze source documents
  2. record in journals
  3. transfer journals entries into ledger
  4. take a trial balance
  5. prepare financial statements
  6. analyze financial statements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

how do accountants classify and summarize financial Data?

A

get it from bookkeepers, interpret the data and report information to management

38
Q

what is a journal?

A

record book where accounting data are first entered.

39
Q

what is a double entry bookkeeping?

A

concept of every business transaction affecting at least 2 accounts.

40
Q

what is a ledger?

A

specialized accounting book in which information from accounting journals is accumulated into accounts & posted so that managers can find all of the information about a specific account in one place

41
Q

what is a trial balance?

A

A summary of all data in account ledgers to show whether figures are correct & balanced

42
Q

what is a balance sheet?

A

reports firm’s financial position on a specific date, normally at the end of a period. statement of financial position

43
Q

what is an income statement?

A

statement of revenues and expenses

44
Q

what is a statement of cash flows?

A

provides a summary of money coming into & going out of firm during a period. It tracks a company’s cash receipts & cash payments. statement of cash receipts and disbursements

45
Q

what is a financial statement?

A

summary of all transactions that have occurred over a particular period, they indicate a firm’s financial health & stability & are a key factor in mgmt DM.

46
Q

what is the balance sheet formula?

A

assets= liabilities plus shareholders equity

47
Q

what are assets?

A

economic resources (things of value) owned by a firm. can be tangible or intangible

48
Q

how are assets listed on the balance sheet?

A

according to their liquidity

49
Q

what is liquidity?

A

refers to how fast an asset is expected to be converted into cash.

50
Q

accounts receivable are considered what?

A

liquid assets

51
Q

what are current assets?

A

items that can or will be converted into cash within one year include cash, accounts receivable & inventory (liquid assets).

52
Q

what are capital assets?

A

items that are relatively permanent goods, (land & buildings) acquired to produce products for a business (fixed assets)

53
Q

what are intangible assets?

A

LT assets that have no real physical form but do have value (patents, trademarks & copyrights).

54
Q

what are liabilities?

A

what business owes to others (debts)

55
Q

what are current liabilities?

A

debts due in 1yr or less

56
Q

what are long term liabilities?

A

debts not due for 1yr +

57
Q

what are accounts payable?

A

money owed by a company to its creditors.

58
Q

what are notes payable?

A

long-term liabilities that indicate the money a company owes its financiers

59
Q

what are bonds payable?

A

long-term liabilities that represent money lent to firm that must be paid back.

60
Q

what are taxes payable?

A

taxes & GST collected & income tax payable.

61
Q

what is owners equity?

A

book value of assets - liabilities of company.

62
Q

what is owners equity in a sole proprierotiship?

A

owner’s or proprietor’s equity or capital.

63
Q

what is owners equity in a partnership?

A

owners’ equity = partners’ equity or capital.

64
Q

in a corporation, shareholders equity is made up of?

A
  1. Common stock: amount owners/ SHs invest
  2. Retained earnings: accumulated earnings from firms’ profits that
    remain in business & not paid out to SH
65
Q

what is an income statement?

A

financial statement that shows a firm’s bottom line—its profit (or loss) after costs, expenses & taxes: known as statement of earnings.

66
Q

what is revenue?

A

value of what is received for goods sold, services rendered & financial sources.

67
Q

what is the difference between revenue and sales?

A

most revenue comes from sales, but there could be other sources of revenue, like rents received.

68
Q

what is cost of goods sold/manufactured?

A

measure of cost of merchandise sold or cost of raw materials & supplies used for producing items for resale

69
Q

what is gross profit? (gross margin)

A

net sales minus cost of goods sold

70
Q

what are operating expenses?

A

costs involved in operating a
business, include rent, salaries, supplies, utilities,
insurance, research & even amortization of
equipment

71
Q

what is depreciation?

A

a decrease in the value of something over time.

72
Q

what is net profit or loss?

A

Revenues - Expenses

73
Q

what is a cash flow statement?

A

Reports cash receipts & disbursements related to 3 major firm activities: operations, investing & financing. Offers firm insight into how to handle cash better so that no cash flow problems occur

74
Q

what are operations in a cash flow statement?

A

cash transactions associated with running the business

75
Q

what is investing in a cash flow statement?

A

cash used in or provided by firm’s investing activities (normally including capital assets)

76
Q

what is financing in a cash flow statement?

A

cash raised from new debt, cash used to pay expenses, past debts or co. dividends

77
Q

what is cash flow?

A

difference bet cash coming in & cash going out of a business.

78
Q

what can happen if cash flow is not properly managed?

A

can cause a business much concern, common mistake among start-ups

79
Q

what is a ratio analysis?

A

looking at a firm’s financial condition & performance through calculations & interpretation of financial ratios

80
Q

what are financial ratios useful in?

A

in analyzing company’s actual performance compared to its past performance, current financial objectives & other firms within its industry

81
Q

what is market liquidity?

A

how quickly an investment can be sold (without impacting price)

82
Q

what is financial liquidity?

A

ability to meet financial obligations

83
Q

what is a liquidity ratio?

A

measure a company’s ability to turn some assets into cash to pay its short-term debts

84
Q

what is a current ratio (liquidity ratio).

A

ratio of a firm’s current assets to its current liabilities.

85
Q

what is an acid test or quick ratio (liquidity ratio)?

A

measures cash, marketable securities (like stocks & bonds), & receivables of a firm, compared to its current liabilities

86
Q

what is the formula for current ratio?

A

current assets/current liabilities

87
Q

what is the formula for quick ratio?

A

liquid assets/current liabilities

88
Q

what is a leverage (debt) ratio?

A

measures degree to which a firm relies on borrowed funds in its operations.

89
Q

what is a profitability (performance) ratio?

A

measure how effectively a firm’s managers are using its various resources to achieve profits.

90
Q

what are three important ratios (performance)

A
  • earnings per share (EPS),
    – return on sales,
    – & return on equity.
91
Q

what is an activity ratio?

A

tell us how effectively management is turning over inventory.

92
Q

what is an inventory turnover ratio?

A

measures speed with which inventory moves through a firm & gets converted into sales. Idle inventory sitting in a warehouse earns nothing & costs money

intro to business test 3 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions