Chapt 17

Question 1

Liquidity

Answer 1

The ease with which an asset can be converted into cash.

Question 2

Current assets

Answer 2

Items that can or will be converted into cash in one year

Question 3

Fixed assets

Answer 3

Assets that are relatively permanent, such as land, buildings, and equipment

Question 4

Intangible assets

Answer 4

Long term assets. Patents,trademarks and copyrights. Have value but no physical form.

Question 5

Liabilities

Answer 5

What a business owes to others (debts)

Question 6

Accounting

Answer 6

The recording, classifying, summarizing and interpreting of financial events and transactions to provide management and other interested parties the info they need to make good decisions.

Question 7

Managerial accounting

Answer 7

Accounting used for managers inside the business

Question 8

CMA certified management accountant

Answer 8

Professional accountant who has met educational and experience.

Question 9

Financial accounting

Answer 9

Accounting information provided for people outside the organization.

Question 10

Annual report

Answer 10

Yearly statement of financial condition, progress, and expectations.

Question 11

Private accountant

Answer 11

An account who works for a single firm, gov agency, or non profit

Question 12

Public accountant

Answer 12

An accountant who provides services to individuals or businesses on fee basis

Question 13

CPA certified public accountant

Answer 13

An accountant who passes a series of exams by institute of AICPA

Question 14

Auditing

Answer 14

Job of reviewing information used to prepare financial statements

Question 15

I dependent audit

Answer 15

An evaluation and unbiased opinion about the accuracy of a companies financial statements

Question 16

CIA certified internal auditor

Answer 16

An accountant who has a BA degree and 2 yrs experience in internal auditing. And passed exam.

Question 17

Tax accountant

Answer 17

Trained in law and preparing tax returns

Question 18

Accounting cycle

Answer 18

6 step procedure that results in the preparation and analysis of the major financial statements

Question 19

Bookkeeping

Answer 19

The recording of business transactions

Question 20

Journal

Answer 20

The record book or computer program where accounting data is entered

Question 21

Accounting 6 step cycle

Answer 21

Analyze source docs slips, sales records

Record transactions in journals

Transfer post journal entries into ledger

Take trial balance

Prepare financial statements

Analyze financial statements

Question 22

Double-entry book keeping

Answer 22

Practice of writing every business transaction in two places

Question 23

Ledger

Answer 23

A specialized accounting book or computer program info from account journals are put into one place so managers can find all the info.

Question 24

Trial balance

Answer 24

A summary of all financial data in account ledgers that ensures the figures are correct and balanced

Question 25

Financial statement

Answer 25

A summary of all the financial transactions that have occurred over a particular period

Question 26

Fundamental accounting equation

Answer 26

Assets=liabilities+owners equity this is basis for the balance sheet.

Question 27

Balance sheet

Answer 27

Financial statement that reports a firms fin

Question 28

Liquidity

Answer 28

The ease with which an asset can be converted into cash

Question 29

Current assets

Answer 29

Items that can or will be converted into cash within one year

Question 30

Fixed assets

Answer 30

Assets that are relatively permanent, such as land , buildings, and equipment

Question 31

Accounts payable

Answer 31

Current liabilities or bills the company owes to others for merchandise or services purchased on credit but not yet paid for.

Question 32

Notes payable

Answer 32

Short term and long term liabilities that a business promises to repay by a certain date.

Question 33

Bonds payable

Answer 33

Long term liabilities that represent money lent to the firm that must be paid back

Question 34

Owners equity

Answer 34

The amount of the business that belongs to the owners minus any liabilities owed by the business

Question 35

Retained earnings

Answer 35

The accumulated earnings from a firms profitable operations that were reinvested in the business and not paid out to stockholders in dividends

Question 36

Income statement

Answer 36

The financial statement that shows a firms profit after costs. Expenses, and taxes; it summarizes all of the resources that have come into the firm, all the resources that have left the firm and the resulting net income