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Questions and Answers
A company reports a significant drop in net profit despite an increase in sales revenue. Which of the following could explain this scenario?
A company reports a significant drop in net profit despite an increase in sales revenue. Which of the following could explain this scenario?
- Reduction in the effective tax rate.
- Decrease in operating expenses.
- Decrease in interest expenses.
- Increase in the cost of goods sold. (correct)
In a period of rising inflation, using the FIFO (First-In, First-Out) inventory valuation method will generally result in a higher reported net income compared to using the LIFO (Last-In, First-Out) method.
In a period of rising inflation, using the FIFO (First-In, First-Out) inventory valuation method will generally result in a higher reported net income compared to using the LIFO (Last-In, First-Out) method.
True (A)
Explain how accelerated depreciation methods impact a company's financial statements in the early years of an asset's life compared to straight-line depreciation.
Explain how accelerated depreciation methods impact a company's financial statements in the early years of an asset's life compared to straight-line depreciation.
Accelerated depreciation results in higher depreciation expense, lower net income, and lower asset book value in early years compared to straight-line depreciation.
The accounting equation states that Assets = Liabilities + ______.
The accounting equation states that Assets = Liabilities + ______.
Match the following financial ratios with their primary purpose:
Match the following financial ratios with their primary purpose:
Which accounting principle requires that revenue be recognized when it is earned, regardless of when cash is received?
Which accounting principle requires that revenue be recognized when it is earned, regardless of when cash is received?
A contingent liability should always be recorded on the balance sheet, regardless of the probability of the obligation materializing.
A contingent liability should always be recorded on the balance sheet, regardless of the probability of the obligation materializing.
Describe the difference between direct and indirect methods of preparing the statement of cash flows.
Describe the difference between direct and indirect methods of preparing the statement of cash flows.
Goodwill is an intangible asset that arises when one company ______ another company for a price higher than the net identifiable assets' fair value.
Goodwill is an intangible asset that arises when one company ______ another company for a price higher than the net identifiable assets' fair value.
Match the following accounting terms with their definitions:
Match the following accounting terms with their definitions:
Which of the following is an example of a contra-asset account?
Which of the following is an example of a contra-asset account?
Under the double-entry accounting system, every transaction affects at least two accounts.
Under the double-entry accounting system, every transaction affects at least two accounts.
Explain the purpose of a bank reconciliation and what types of discrepancies it helps identify.
Explain the purpose of a bank reconciliation and what types of discrepancies it helps identify.
The income statement reports a company's financial performance over a ______ of time.
The income statement reports a company's financial performance over a ______ of time.
Match the following financial statement elements with the financial statement on which they appear:
Match the following financial statement elements with the financial statement on which they appear:
What is the primary purpose of the Sarbanes-Oxley Act (SOX)?
What is the primary purpose of the Sarbanes-Oxley Act (SOX)?
A purchase of land for cash will decrease total assets on the balance sheet.
A purchase of land for cash will decrease total assets on the balance sheet.
What are the key differences between financial accounting and managerial accounting?
What are the key differences between financial accounting and managerial accounting?
The process of allocating the cost of a tangible asset over its useful life is called ______.
The process of allocating the cost of a tangible asset over its useful life is called ______.
Match the following inventory costing methods with their characteristics:
Match the following inventory costing methods with their characteristics:
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Study Notes
- This chapter covers force vectors in statics.
Scalars and Vectors
- Scalars have only magnitude, which can be positive or negative.
- Length, area, volume, mass, time, and temperature are examples of scalars.
- Vectors possess magnitude, direction, and sense.
- Position, force, and moment are examples of vectors.
- Vector representation can be symbolic (A) or by magnitude (A or |A|) and direction (angle θ).
Vector Operations
- Multiplying a vector A by a scalar a results in a new vector B where ${\bf{B}} = a{\bf{A}}$.
- The magnitude of B is $B = \left| a \right|A$.
- If a is positive, B has the same direction as A, but if a is negative, B has the opposite direction.
Vector Addition
- The triangle rule and parallelogram law are methods for graphically adding vectors.
- Resultant force ${\bf{F}}_R$ is the sum of individual forces: ${\bf{F}}_R = {\bf{F}}_1 + {\bf{F}}_2$.
Vector Subtraction
- Vector subtraction is defined as ${\bf{A}} - {\bf{B}} = {\bf{A}} + (-{\bf{B}})$.
Cartesian Vectors
- Uses a right-handed coordinate system.
- A vector ${\bf{A}}$ can be expressed in terms of its rectangular components: ${\bf{A}} = A_x{\bf{i}} + A_y{\bf{j}} + A_z{\bf{k}}$.
- $A_x{\bf{i}}$, $A_y{\bf{j}}$, $A_z{\bf{k}}$ are vector components of A in the x, y, z directions while $A_x$, $A_y$, $A_z$ are scalar components of A in the x, y, z directions.
Magnitude of Cartesian Vector
- The magnitude is $A = \sqrt{A_x^2 + A_y^2 + A_z^2}$.
Direction of a Cartesian Vector
- Direction is defined by angles $\alpha$, $\beta$, $\gamma$, and direction cosines $\cos \alpha = \frac{A_x}{A}$, $\cos \beta = \frac{A_y}{A}$, and $\cos \gamma = \frac{A_z}{A}$.
- $\alpha$, $\beta$, and $\gamma$ are the direction angles of A with respect to the x, y, and z axes, respectively.
- The relationship between directional cosines is $\cos^2 \alpha + \cos^2 \beta + \cos^2 \gamma = 1$.
Unit Vector
- A unit vector ${\bf{u}}_A = \frac{{\bf{A}}}{A} = \cos \alpha {\bf{i}} + \cos \beta {\bf{j}} + \cos \gamma {\bf{k}}$ defines the direction of A.
- Direction angles can be found by determining the components of the unit vector uA and using the inverse cosine function.
- Cartesian vector representation is ${\bf{A}} = A{\bf{u}}_A = A \cos \alpha {\bf{i}} + A \cos \beta {\bf{j}} + A \cos \gamma {\bf{k}}$ or ${\bf{A}} = A_x{\bf{i}} + A_y{\bf{j}} + A_z{\bf{k}}$.
Addition of Cartesian Vectors
- The resultant vector R from adding vectors A and B is ${\bf{R}} = {\bf{A}} + {\bf{B}} = (A_x + B_x){\bf{i}} + (A_y + B_y){\bf{j}} + (A_z + B_z){\bf{k}}$.
Position Vectors
- A position vector r locates a point in space relative to another point: ${\bf{r}} = x{\bf{i}} + y{\bf{j}} + z{\bf{k}}$.
- The position vector from point A to point B is ${\bf{r}} = (x_B - x_A){\bf{i}} + (y_B - y_A){\bf{j}} + (z_B - z_A){\bf{k}}$.
Force Vector Along a Line
- ${\bf{F}} = F{\bf{u}} = F \frac{{\bf{r}}}{r}$ where u is a unit vector and r is a position vector defining the line's direction, and F is the force magnitude.
Dot Product
- The dot product is defined as ${\bf{A}} \cdot {\bf{B}} = AB \cos \theta$.
- A and B are the magnitudes of vectors A and B, and θ is the angle between them.
- The dot product is commutative: ${\bf{A}} \cdot {\bf{B}} = {\bf{B}} \cdot {\bf{A}}$.
- Multiplication by a scalar: $a({\bf{A}} \cdot {\bf{B}}) = ({\bf{aA}}) \cdot {\bf{B}} = {\bf{A}} \cdot (a{\bf{B}})$.
- The dot product is distributive: ${\bf{A}} \cdot ({\bf{B}} + {\bf{C}}) = ({\bf{A}} \cdot {\bf{B}}) + ({\bf{A}} \cdot {\bf{C}})$.
- In Cartesian form: ${\bf{A}} \cdot {\bf{B}} = A_xB_x + A_yB_y + A_zB_z$.
Applications of the Dot Product
- Allows for finding the angle between two vectors using $\theta = \cos^{-1} \left( \frac{{\bf{A}} \cdot {\bf{B}}}{AB} \right)$.
- It determines the component of a vector in a specified direction: $A_{\parallel} = A \cos \theta = {\bf{A}} \cdot {\bf{u}}$.
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