Podcast
Questions and Answers
What is the first step in the accounting cycle?
What is the first step in the accounting cycle?
- Prepare trial balance
- Analyze financial statements
- Analyze business transaction documents (correct)
- Prepare financial statements
Which of the following represents a liability for an antique mall?
Which of the following represents a liability for an antique mall?
- Accounting and inventory software
- An expensive Chinese urn with a small crack
- Money owed to utility companies (correct)
- Promotional signs
Which statement about international accounting standards is correct?
Which statement about international accounting standards is correct?
- They do not exist. (correct)
- They all follow GAAP regulations.
- They are supervised by a special agency of the United Nations.
- They are required for successful international trade.
What type of liability is a six-month loan for refurbishing a fishing boat?
What type of liability is a six-month loan for refurbishing a fishing boat?
What do liquidity ratios measure?
What do liquidity ratios measure?
How has the Sarbanes-Oxley Act impacted accountants?
How has the Sarbanes-Oxley Act impacted accountants?
After all expenses have been subtracted from revenues, the final figure when negative is called what?
After all expenses have been subtracted from revenues, the final figure when negative is called what?
How are trademarks, franchises, patents, and copyrights categorized in accounting?
How are trademarks, franchises, patents, and copyrights categorized in accounting?
What is a summary of a company's earnings and expenditures over a period known as?
What is a summary of a company's earnings and expenditures over a period known as?
What is true about the acceptable turnover ratio?
What is true about the acceptable turnover ratio?
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Study Notes
Accounting Cycle
- The first step is analyzing business transaction documents.
Liabilities in Business
- In an antique mall, money owed to utility companies represents a liability.
International Accounting Standards
- No universally accepted international accounting standards exist.
Types of Liabilities
- A six-month loan used for refurbishing a fishing boat is classified as a current liability.
Liquidity Ratios
- Liquidity ratios assess short-term financial stability of a business.
Sarbanes-Oxley Act
- This act has eliminated many non-auditing tasks accountants used to provide for customers.
Income Statement
- After expenses are deducted from revenues, a negative figure is referred to as a net loss.
Types of Assets
- Trademarks, franchises, patents, and copyrights are categorized as intangible assets.
Summary Financial Statement
- An income statement summarizes what a company has earned and spent over a specific period.
Turnover Ratio
- Acceptable turnover ratios vary by industry, reflecting different operational standards.
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