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Questions and Answers
What is the term for the things of value owned or leased by a business?
What is the term for the things of value owned or leased by a business?
- Liabilities
- Owners' equity
- Assets (correct)
- Expenses
What is the formula for the basic accounting equation?
What is the formula for the basic accounting equation?
- Assets = Liabilities - Owners' equity
- Assets + Owners' equity = Liabilities
- Assets + Liabilities = Owners' equity
- Assets - Liabilities = Owners' equity (correct)
What is the term for the method of recording financial transactions that requires a debit entry and credit entry for each transaction?
What is the term for the method of recording financial transactions that requires a debit entry and credit entry for each transaction?
- Accounting equation
- Single-entry bookkeeping
- Matching principle
- Double-entry bookkeeping (correct)
What is the principle that requires expenses incurred in producing revenue be deducted from the revenues they generate during an accounting period?
What is the principle that requires expenses incurred in producing revenue be deducted from the revenues they generate during an accounting period?
What is the portion of a company's assets that belongs to the owners after obligations to all creditors have been met?
What is the portion of a company's assets that belongs to the owners after obligations to all creditors have been met?
What is the term for claims against a firm's assets by creditors?
What is the term for claims against a firm's assets by creditors?
What is the purpose of the accounting equation?
What is the purpose of the accounting equation?
What is the result of subtracting liabilities from assets?
What is the result of subtracting liabilities from assets?
What is the measure of a firm's profitability for each share of outstanding stock?
What is the measure of a firm's profitability for each share of outstanding stock?
Which ratio is calculated by dividing current assets by current liabilities?
Which ratio is calculated by dividing current assets by current liabilities?
What is the ratio between net income after taxes and total owners' equity?
What is the ratio between net income after taxes and total owners' equity?
What is calculated by adding cash, marketable securities, and receivables, then dividing that sum by current liabilities?
What is calculated by adding cash, marketable securities, and receivables, then dividing that sum by current liabilities?
What is the ratio between net income after taxes and net sales?
What is the ratio between net income after taxes and net sales?
What is the measure of the time a company takes to turn its inventory into sales?
What is the measure of the time a company takes to turn its inventory into sales?
What is calculated by dividing cost of goods sold by the average value of inventory for a period?
What is calculated by dividing cost of goods sold by the average value of inventory for a period?
What is the difference between current assets and current liabilities?
What is the difference between current assets and current liabilities?
What is the primary focus of financial accounting?
What is the primary focus of financial accounting?
Who is responsible for overseeing all accounting functions in a company?
Who is responsible for overseeing all accounting functions in a company?
What is the term for the clerical aspect of accounting?
What is the term for the clerical aspect of accounting?
What is the term for the formal evaluation of the fairness and reliability of a client's financial statements?
What is the term for the formal evaluation of the fairness and reliability of a client's financial statements?
What is the term for in-house accountants employed by organizations and businesses other than a public accounting firm?
What is the term for in-house accountants employed by organizations and businesses other than a public accounting firm?
What is the term for professionally licensed accountants who meet certain requirements for education and experience?
What is the term for professionally licensed accountants who meet certain requirements for education and experience?
What area of accounting is concerned with preparing data for use by managers within the organization?
What area of accounting is concerned with preparing data for use by managers within the organization?
What is the term for professionals who provide accounting services to other businesses and individuals for a fee?
What is the term for professionals who provide accounting services to other businesses and individuals for a fee?
What is the primary purpose of a balance sheet?
What is the primary purpose of a balance sheet?
What is the key difference between current assets and fixed assets?
What is the key difference between current assets and fixed assets?
What is the purpose of an income statement?
What is the purpose of an income statement?
What is the difference between current liabilities and long-term liabilities?
What is the difference between current liabilities and long-term liabilities?
What is the definition of retained earnings?
What is the definition of retained earnings?
What is the primary purpose of a cash flow statement?
What is the primary purpose of a cash flow statement?
What is the difference between an income statement and a balance sheet?
What is the difference between an income statement and a balance sheet?
What is the relationship between a company's retained earnings and its shareholders' equity?
What is the relationship between a company's retained earnings and its shareholders' equity?
What is the term for the profit earned or loss incurred by a firm, determined by subtracting expenses from revenues?
What is the term for the profit earned or loss incurred by a firm, determined by subtracting expenses from revenues?
What is the cost of producing or acquiring a company’s products for sale during a given period?
What is the cost of producing or acquiring a company’s products for sale during a given period?
What is the amount remaining when the cost of goods sold is deducted from net sales?
What is the amount remaining when the cost of goods sold is deducted from net sales?
What is the term for all costs of operation that are not included under cost of goods sold?
What is the term for all costs of operation that are not included under cost of goods sold?
What is the term for a firm’s earnings before interest, taxes, depreciation, and amortization?
What is the term for a firm’s earnings before interest, taxes, depreciation, and amortization?
What is the statement that presents information on a firm’s sources and uses of cash?
What is the statement that presents information on a firm’s sources and uses of cash?
What is the term for the profit earned by a firm, determined by subtracting expenses from revenues, also referred to as the ________?
What is the term for the profit earned by a firm, determined by subtracting expenses from revenues, also referred to as the ________?
What is the cost of producing or acquiring a company’s products for sale during a given period, also known as ________?
What is the cost of producing or acquiring a company’s products for sale during a given period, also known as ________?
EBITDA is a measure of a firm's profitability for each share of outstanding stock.
EBITDA is a measure of a firm's profitability for each share of outstanding stock.
The cost of goods sold is also known as gross profit.
The cost of goods sold is also known as gross profit.
Operating expenses are all costs of operation that are included under cost of goods sold.
Operating expenses are all costs of operation that are included under cost of goods sold.
The statement of cash flows presents information on a firm's revenues and expenses.
The statement of cash flows presents information on a firm's revenues and expenses.
Net income is also known as gross profit.
Net income is also known as gross profit.
The income statement is a statement of a firm's cash receipts and cash payments.
The income statement is a statement of a firm's cash receipts and cash payments.
Gross profit is the profit earned or loss incurred by a firm, determined by subtracting expenses from revenues.
Gross profit is the profit earned or loss incurred by a firm, determined by subtracting expenses from revenues.
The statement of cash flows is a statement of a firm's revenues and expenses.
The statement of cash flows is a statement of a firm's revenues and expenses.
A debt-to-equity ratio of 1:1 indicates that a company's total liabilities are equal to its total assets.
A debt-to-equity ratio of 1:1 indicates that a company's total liabilities are equal to its total assets.
The accounts receivable turnover ratio is a measure of a company's liquidity.
The accounts receivable turnover ratio is a measure of a company's liquidity.
A blockchain is a type of distributed ledger that is not shared among market participants.
A blockchain is a type of distributed ledger that is not shared among market participants.
The debt-to-assets ratio is a measure of a company's profitability.
The debt-to-assets ratio is a measure of a company's profitability.
A distributed ledger is a type of blockchain that is used to record transactions.
A distributed ledger is a type of blockchain that is used to record transactions.
The accounts receivable turnover ratio is calculated by dividing total assets by the average value of accounts receivable for a period.
The accounts receivable turnover ratio is calculated by dividing total assets by the average value of accounts receivable for a period.
The debt-to-equity ratio is a measure of a company's ability to carry long-term debt.
The debt-to-equity ratio is a measure of a company's ability to carry long-term debt.
A company's total liabilities are equal to its total assets minus its total equity.
A company's total liabilities are equal to its total assets minus its total equity.
The role of a controller is to oversee the financial functions of a company.
The role of a controller is to oversee the financial functions of a company.
Management accounting is concerned with preparing financial information for users outside the organization.
Management accounting is concerned with preparing financial information for users outside the organization.
Private accountants are professionally licensed accountants who meet certain requirements for education and experience.
Private accountants are professionally licensed accountants who meet certain requirements for education and experience.
Audit is a formal evaluation of the fairness and reliability of a client's financial statements.
Audit is a formal evaluation of the fairness and reliability of a client's financial statements.
Bookkeeping is the same as financial accounting.
Bookkeeping is the same as financial accounting.
Public accountants are in-house accountants employed by organizations and businesses.
Public accountants are in-house accountants employed by organizations and businesses.
Controller is the lowest-ranking accountant in a company.
Controller is the lowest-ranking accountant in a company.
Long-term liabilities are obligations that must be met within three years.
Long-term liabilities are obligations that must be met within three years.
Financial accounting is concerned with preparing data for use by managers within the organization.
Financial accounting is concerned with preparing data for use by managers within the organization.
Retained earnings is the portion of shareholders' equity earned by the company and distributed to its owners in the form of dividends.
Retained earnings is the portion of shareholders' equity earned by the company and distributed to its owners in the form of dividends.
A balance sheet is a financial record of a company's revenues, expenses, and profits over a given period of time.
A balance sheet is a financial record of a company's revenues, expenses, and profits over a given period of time.
Current assets are assets retained for long-term use.
Current assets are assets retained for long-term use.
An income statement is also known as a cash flow statement.
An income statement is also known as a cash flow statement.
Fixed assets are also referred to as current assets.
Fixed assets are also referred to as current assets.
Long-term liabilities are also referred to as current liabilities.
Long-term liabilities are also referred to as current liabilities.
Retained earnings is the result of subtracting liabilities from assets.
Retained earnings is the result of subtracting liabilities from assets.
The accounting equation is Assets + Liabilities = Owners' Equity
The accounting equation is Assets + Liabilities = Owners' Equity
The matching principle requires that revenues be matched with expenses in an accounting period
The matching principle requires that revenues be matched with expenses in an accounting period
Double-entry bookkeeping is a method of recording financial transactions that requires only a debit entry for each transaction
Double-entry bookkeeping is a method of recording financial transactions that requires only a debit entry for each transaction
Assets include both things of value owned and leased by a business
Assets include both things of value owned and leased by a business
Liabilities are the claims against a firm's assets by the owners
Liabilities are the claims against a firm's assets by the owners
The accounting equation is a fundamental concept in financial accounting
The accounting equation is a fundamental concept in financial accounting
The matching principle is a concept used in financial accounting to match costs with revenues
The matching principle is a concept used in financial accounting to match costs with revenues
Double-entry bookkeeping is used to ensure that the accounting equation is always kept out of balance
Double-entry bookkeeping is used to ensure that the accounting equation is always kept out of balance
