Chapter 13

Question 1

What involves the determination and control of cost?

Answer 1

cost accounting

Question 2

What is an area of accounting concerned with an independent review of accounting records

Answer 2

auditing

Question 3

What is concerned with the reporting of transactions for an organization and the periodic preparation of various reports from these records?

Answer 3

Financial accounting

Question 4

What uses historical and estimated financial data to assist management in daily operations and in planning future operations?

Answer 4

Managerial accounting

Question 5

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

Answer 5

(Cost of the asset - salvage value)/ Years of useful life

Question 6

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?

Answer 6

Balance Sheet

Question 7

what is the financial report that presents the net income or profit of an organization for the accounting period?

Answer 7

Income statement

Question 8

What are resources of a company?

Answer 8

Assets

Question 9

What is the debts of a company?

Answer 9

liabilities

Question 10

What is the money value of a company in excess of its debts that is held by the owners

Answer 10

owner’s equity

Question 11

What is analysis of financial data in terms of relationships, facilitates interpretation and understanding

Answer 11

ratio analysis

Question 12

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

Answer 12

common ratio

Question 13

What is the ratio may be expressed as a percentage, such as a percentage of sales

Answer 13

as a percentage

Question 14

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

Answer 14

as a turnover

Question 15

What is the relationship may also be expressed in dollars per unit, such as sales dollars per seat at a restaurant

Answer 15

on a per unit basis

Question 16

What ratio indicate the organization’s ability to meet current obligations in other words, its ability to pay bills when done?

Answer 16

liquidity ratios

Question 17

What is the ratio is the relationship between current assets to current liabilities? Current ratio = current assets/current liabilities

Answer 17

current ratio

Question 18

What is the formula for acid-test ratio?

Answer 18

acid-test ratio = (cash + accounts receivable + marketable securities)/ current liabilities

Question 19

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?

Answer 19

Solvency ratio = Total assets/total liabilities

Question 20

What is another activity ratio important in many segments of the industry? Percentage of occupancy. & what is the formula?

Answer 20

Percentage of occupancy = (No. of beds/rooms occupied) / No. of beds/rooms available

Question 21

What ratio measures the ability of an organization to generate profit in relation to sales or the investment in assets

Answer 21

profitability ratios

Question 22

What are the three major profitability ratios?

Answer 22

Profit margin= Net profit/ sales

Return on equity = net profit/ equity

Return on assets = net profit/ total assets

Question 23

What are primarily concerned with analysis of the success of the operation in generating revenues and in controlling expenses

Answer 23

Operating ratios