Chapter 12

Question 1

Fields of accounting

Answer 1

Management accounting
Financial accounting

Question 2

Management accounting

Answer 2

Talk w/ manages of the business (internal)

Question 3

Financial accounting

Answer 3

Prepare financial statements and assess those reports (internal and external)

Question 4

Financial statements

Answer 4

Income statement
Balance sheet
Statement of OE
Statement of cash flow

Question 5

Income statement equation (merchandising)

Answer 5

Revenues - cogs = gross profit - expenses = Ni

Question 6

Balance sheet equation

Answer 6

A = L + OE

Question 7

Statement of OE equation

Answer 7

Beg OE + ni= end oe

Question 8

Classified balance sheet

Answer 8

Total assets and liabilities in separate categories

Question 9

Current assets

Answer 9

Will be converted into cash by the ent of year

Question 10

Long-term assets

Answer 10

Liabilities will be paid off in more than a year

Question 11

Vertical percentage analysis

Answer 11

Analysis of an income statement treating the relationship of each item as a percentage of a base

Question 12

Ratio analysis

Answer 12

Technique for evaluating a company’s financial performance by looking at the relationship between 2 numbers