Chapter 13 Flashcards
What involves the determination and control of cost?
cost accounting
What is an area of accounting concerned with an independent review of accounting records
auditing
What is concerned with the reporting of transactions for an organization and the periodic preparation of various reports from these records?
Financial accounting
What uses historical and estimated financial data to assist management in daily operations and in planning future operations?
Managerial accounting
what is the formula of depreciation, which is the systematic means by which costs associated with the acquisition and installation of a fixed asset are allocated over the estimated useful life of the asset
(Cost of the asset - salvage value)/ Years of useful life
What is the statement of assets, liabilities or debts, and capital or owner’s equity at a given time or at the ned of the accounting period?
Balance Sheet
what is the financial report that presents the net income or profit of an organization for the accounting period?
Income statement
What are resources of a company?
Assets
What is the debts of a company?
liabilities
What is the money value of a company in excess of its debts that is held by the owners
owner’s equity
What is analysis of financial data in terms of relationships, facilitates interpretation and understanding
ratio analysis
What is the ratio between x and y may be stated as x to y (x:y). for example, an operation that has 12 full-time employees and 4 part-time employees would have a full-time to part-time employee is ratio to 3 to 1
common ratio
What is the ratio may be expressed as a percentage, such as a percentage of sales
as a percentage
Some relationships are best expressed as a turnover or the number of times x must be ‘turned over’ to yield the value of y, calculated by dividing y by x. The nu,her of times inventory is turned over in a month is one example
as a turnover
What is the relationship may also be expressed in dollars per unit, such as sales dollars per seat at a restaurant
on a per unit basis
What ratio indicate the organization’s ability to meet current obligations in other words, its ability to pay bills when done?
liquidity ratios
What is the ratio is the relationship between current assets to current liabilities? Current ratio = current assets/current liabilities
current ratio
What is the formula for acid-test ratio?
acid-test ratio = (cash + accounts receivable + marketable securities)/ current liabilities
What ratios are used to examine an establishment’s ability to meet its long-term financial obligation and its financial leverage? Solvency Ratio & what is the formula?
Solvency ratio = Total assets/total liabilities
What is another activity ratio important in many segments of the industry? Percentage of occupancy. & what is the formula?
Percentage of occupancy = (No. of beds/rooms occupied) / No. of beds/rooms available
What ratio measures the ability of an organization to generate profit in relation to sales or the investment in assets
profitability ratios
What are the three major profitability ratios?
Profit margin= Net profit/ sales
Return on equity = net profit/ equity
Return on assets = net profit/ total assets
What are primarily concerned with analysis of the success of the operation in generating revenues and in controlling expenses
Operating ratios
