Podcast
Questions and Answers
What is the purpose of an Aging Report?
What is the purpose of an Aging Report?
- To list out all assets and liabilities
- To calculate the Average Collection Period
- To record professional fees and disbursements
- To keep track of invoices due and past due (correct)
How is the Average Collection Period calculated?
How is the Average Collection Period calculated?
- Accounts receivable divided by gross revenue x 365 (correct)
- Total assets divided by total liabilities
- Cash balance divided by accounts payable
- Total expenses minus total revenue
What does Bad Debt represent?
What does Bad Debt represent?
- The amount of accounts receivable that will not be collected from clients (correct)
- The total assets of the practice
- Income generated from professional fees
- The cash position of the practice
Which financial statement provides a snapshot of the practice's financial position at a specific point in time?
Which financial statement provides a snapshot of the practice's financial position at a specific point in time?
What does Accounts Payable represent?
What does Accounts Payable represent?
What does the Cash Book primarily track?
What does the Cash Book primarily track?
What is the primary purpose of time reports or time sheets?
What is the primary purpose of time reports or time sheets?
How should the type of service and phase of the project be identified in time reports?
How should the type of service and phase of the project be identified in time reports?
If a fee for schematic design is budgeted at $12,000 and the hourly wage is $40, how many hours should be budgeted?
If a fee for schematic design is budgeted at $12,000 and the hourly wage is $40, how many hours should be budgeted?
If an individual has a utilization rate of 90% and works 37.5 hours per week, how many billable hours should be budgeted per week?
If an individual has a utilization rate of 90% and works 37.5 hours per week, how many billable hours should be budgeted per week?
According to the passage, what is the recommended practice when reviewing time sheets?
According to the passage, what is the recommended practice when reviewing time sheets?
What does the accrual system in accounting record?
What does the accrual system in accounting record?
Which accounting method are architecture businesses required to follow for tax returns?
Which accounting method are architecture businesses required to follow for tax returns?
What is the primary focus of the income statement in financial reporting?
What is the primary focus of the income statement in financial reporting?
What is the formula for calculating profit or loss on an income statement?
What is the formula for calculating profit or loss on an income statement?
What does the balance sheet provide information about?
What does the balance sheet provide information about?
Why is cashflow vital for an architectural practice?
Why is cashflow vital for an architectural practice?
What type of financial reports are prepared using the accrual system?
What type of financial reports are prepared using the accrual system?
What does the basic formula of the balance sheet represent?
What does the basic formula of the balance sheet represent?
What is another name for the income statement in financial reporting?
What is another name for the income statement in financial reporting?
Why is it important for architects running a practice to understand their financial statements?
Why is it important for architects running a practice to understand their financial statements?
What is the purpose of requesting proposals from other accounting firms?
What is the purpose of requesting proposals from other accounting firms?
When can architects hire non-CPAs or bookkeepers instead of CPAs?
When can architects hire non-CPAs or bookkeepers instead of CPAs?
What is the purpose of establishing a capital reserve for an architect's practice?
What is the purpose of establishing a capital reserve for an architect's practice?
What is the advantage of negotiating a line of credit with a bank instead of short-term loans?
What is the advantage of negotiating a line of credit with a bank instead of short-term loans?
What does the bank generally require if the amount requested for borrowing funds is high?
What does the bank generally require if the amount requested for borrowing funds is high?
Why should architects provide complete records of past performance, budgets, and financial plans when borrowing funds?
Why should architects provide complete records of past performance, budgets, and financial plans when borrowing funds?
What types of information can assist the architect in preparing accurate budgets and controlling expenses?
What types of information can assist the architect in preparing accurate budgets and controlling expenses?
"All projects should generate a profit" - What is the only possible exception to this principle?
"All projects should generate a profit" - What is the only possible exception to this principle?
When is the best time to negotiate for a line of credit with a bank?
When is the best time to negotiate for a line of credit with a bank?
What determines the interest rate quoted by the bank for financing architectural practices?
What determines the interest rate quoted by the bank for financing architectural practices?
What does the current ratio measure?
What does the current ratio measure?
What does the debt to equity ratio indicate if debt is higher than equity?
What does the debt to equity ratio indicate if debt is higher than equity?
What does depreciation/amortization account for?
What does depreciation/amortization account for?
What is included in direct personnel expense?
What is included in direct personnel expense?
What does the labour multiplier represent?
What does the labour multiplier represent?
What is considered when calculating the overhead rate?
What is considered when calculating the overhead rate?
Why is it important for the fiscal year-end to correspond to the end of the calendar year?
Why is it important for the fiscal year-end to correspond to the end of the calendar year?
What is not part of current liabilities?
What is not part of current liabilities?
What does the debt to equity ratio formula calculate?
What does the debt to equity ratio formula calculate?
What is the purpose of estimating the fees for schematic design according to the text?
What is the purpose of estimating the fees for schematic design according to the text?
How can billing rates be established effectively according to the text?
How can billing rates be established effectively according to the text?
What factor is included in the multiplier used to determine billing rates?
What factor is included in the multiplier used to determine billing rates?
Why should utilization factors be monitored regularly according to the text?
Why should utilization factors be monitored regularly according to the text?
What does the utilization factor measure according to the text?
What does the utilization factor measure according to the text?
What is NOT included in billing rates according to the text?
What is NOT included in billing rates according to the text?
What is the formula for calculating profit margin?
What is the formula for calculating profit margin?
How are project costs monitored and controlled efficiently according to the text?
How are project costs monitored and controlled efficiently according to the text?
What should the investment of shareholders or partners in an architectural practice earn?
What should the investment of shareholders or partners in an architectural practice earn?
What is the starting point for financial planning in an architectural practice?
What is the starting point for financial planning in an architectural practice?
Which financial report documents all income, expenses, and the resulting profit or loss?
Which financial report documents all income, expenses, and the resulting profit or loss?
What records are used to calculate billing rates for staff members?
What records are used to calculate billing rates for staff members?
What should a financial plan identify for any new direction in an architectural practice?
What should a financial plan identify for any new direction in an architectural practice?
What is the typical time period covered by short-term financial planning or budgeting?
What is the typical time period covered by short-term financial planning or budgeting?
What is necessary to attract talent, secure bank loans, and grow business operations?
What is necessary to attract talent, secure bank loans, and grow business operations?
What should budgets record in addition to projected income and expenses?
What should budgets record in addition to projected income and expenses?
What is included in Payroll Burden besides statutory benefits?
What is included in Payroll Burden besides statutory benefits?
What is the purpose of setting aside a percentage of profit as a capital reserve?
What is the purpose of setting aside a percentage of profit as a capital reserve?
What factors should projected income be adjusted for in an architectural practice?
What factors should projected income be adjusted for in an architectural practice?
What type of accounting is performed within an architectural practice?
What type of accounting is performed within an architectural practice?
What is the significance of the distribution of incentive bonuses to staff based on performance review factors?
What is the significance of the distribution of incentive bonuses to staff based on performance review factors?
What level of assurance does a review provide regarding financial statements?
What level of assurance does a review provide regarding financial statements?
What type of assurance do banks typically require when working to secure external funding?
What type of assurance do banks typically require when working to secure external funding?
What are records of accounting considered?
What are records of accounting considered?
Which financial statement provides a detailed explanation of the change in cash on the balance sheet?
Which financial statement provides a detailed explanation of the change in cash on the balance sheet?
What can help a firm be financially successful according to the text?
What can help a firm be financially successful according to the text?
Why is it important for a company to have enough cash even if it's profitable on the income statement?
Why is it important for a company to have enough cash even if it's profitable on the income statement?
What role do finance professionals like accountants play according to the text?
What role do finance professionals like accountants play according to the text?
What does the cashflow forecast help in determining?
What does the cashflow forecast help in determining?
How often should a cashflow forecast be monitored according to the text?
How often should a cashflow forecast be monitored according to the text?
What difference exists between profit and cash according to the text?
What difference exists between profit and cash according to the text?
Who can work with financial data according to the text?
Who can work with financial data according to the text?
What is essential for a good relationship between an architect and an accountant?
What is essential for a good relationship between an architect and an accountant?
What is a CPA responsible for according to the text?
What is a CPA responsible for according to the text?
