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Techno Finals > FINANCIAL ANALYSIS AND ACCOUNTING > Flashcards

FINANCIAL ANALYSIS AND ACCOUNTING Flashcards

1
Q

It is the process of evaluating businesses, projects, budgets, and other finance-related
transactions to determine their performance and suitability.

A

financial analysis

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2
Q

It is used to evaluate economic trends, set financial policy, build long-term plans for business
activity, and identify projects or companies for investment.

A

financial analysis

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3
Q

It largely determines the organization’s success

A

financial performance

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4
Q

It contains information about the company’s assets, liabilities, and capital accounts

A

balance sheet

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5
Q

It contains information about the company’s gross income, expenses, and profits.

A

income statement

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6
Q

It is a financial statement that provides aggregate data regarding all cash inflows a company
receives from its ongoing operations and external investment sources.

A

cash flow statement

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7
Q

It is a financial statement that shows the assets, liabilities, and capital accounts or shareholder
equity at a specific time.

A

balance sheet

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8
Q

In a nutshell, a balance sheet is designed to communicate the “______” of the company, which
offers a snap of how it is performing and how it will be performing

A

book value

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9
Q

The assets must always be _____ to the sum of the liabilities and shareholders’ equity, which
means they must always be “balanced”.

A

equal

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10
Q

The formula in a balance sheet is ____ because a company must pay for all the things it owns
(assets) by either borrowing money (liabilities) or taking it from investors (shareholder
equity)

A

intuitive

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11
Q

Accounts in assets are listed from top to bottom according to their ____

A

liquidity

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12
Q

They can be converted to cash in a year or less.

A

current assets

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13
Q

These are the most liquid assets that include treasury bills/bank accounts and short-term
certificates of deposits and hard currency.

A

cash and cash equivalents

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14
Q

These are any unrestricted financial instrument that can be bought or sold on liquid market
such as stocks, bonds, and mutual funds

A

marketable securities

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15
Q

These are the balance of money due to a firm for goods or services delivered or used but not
yet paid for by customers. In short, an AR is any amount of money owed by a customer.

A

Account Receivable

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16
Q

This refers to any goods available for sale, valued at the lower of the cost or market price

A

inventory

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17
Q

These represent the value that has already been paid for such as insurance, advertising
contracts, or rent.

A

prepaid expenses

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18
Q

These are the securities that will not or cannot be liquidated in the next year, such as real estate
or investments made in other companies.

A

long term investments

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19
Q

These include non-physical assets such as intellectual property and goodwill. These are generally only listed on the balance sheet if required, rather than developed in-house.

A

intangible assets

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20
Q

These include land, machinery, buildings, fixtures, and vehicles.

A

fixed assets

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21
Q

It is a debt that a company owes to third-party creditors

A

lialibity

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22
Q

It is an owner’s claim after subtracting total liabilities from total assets.

A

shareholder equity

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23
Q

It means the company has enough assets to cover its liabilities

A

positive shareholder equity

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24
Q

An income statement, also referred to as the statement or the statement of revenue and expense, offers important information about a company’s operations, the efficiency of its management, underperforming sectors, and its performance in comparison to peers in the same industry.

A

profit and loss

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25
Q

It is a term frequently used to describe revenue generated by primary operations.

A

operational revenue

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26
Q

This revenue comes from sources other than the buying and selling of goods and services

A

non-operating revenue

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27
Q

These include the net income realized from one-time nonbusiness activities, such as a company selling its old transportation van, unused land, or a subsidiary company.

A

gains

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28
Q

They are the costs incurred by the company to maintain operations and generate profits.

A

expenses

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29
Q
  1. These are all expenses linked to noncore business activities, like interest paid on loan money.
A

secondary activity expenses

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30
Q
  1. These are all costs associated with a loss-making sale of long-term assets, one-time charges, unexpected costs, or expenses associated with legal actions.
A

losses as expenses

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31
Q
  1. This section details the inflows and outflows of cash that are directly related to a company’s primary operations.
A

cash flow from operations

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32
Q
  1. This is the second section of the cash flow statement. As a result of investment gains and losses, it examines cash flows from investing (CFI).
A

cash flow from investing

33
Q
  1. It is also helpful in figuring out how a company makes money for operational growth.
A

cash flow from financing

34
Q
  1. It measures the company’s ability to pay off its short-term debts as they become due, using the company’s current or quick assets, without raising external capital.
A

liquidity

35
Q
  1. This shows the extent to which current assets such of cash, accounts receivable, and inventories of the company can cover its current liabilities (payable within one year). The higher the ratio, the better the company’s liquidity position.
A

current ratio

36
Q
  1. The process of subtracting the cost of a commercial asset over time.
A

depreciation

37
Q
  1. Tasks that must be undertaken from day to day to operate the business and generate revenue.
A

operational activities

38
Q
  1. The costs that a company incurs while performing its normal operational activities.
A

operating expenses

39
Q

39.-40. What are the two types of costing procedures in general? (List alphabetically).

A

actual costing
standard costing

40
Q
  1. An approach to planning that enables businesses to manage resources and earnings in accordance with predicted sales.
A

sales budget

41
Q
  1. An example of paying for a good or service in advance
A

yearly subscription

42
Q
  1. A transaction involving two or more parties in which tangible or intangible commodities, services, or assets are exchanged for money.
A

sales

43
Q
  1. Taxes on this form of income are also lower than on earned income.
A

passive income

44
Q
  1. It is the quantity of money, property, and other value transfers received by persons or corporations over a specific period as payment.
A

income

45
Q
  1. (True or False). Debit to depreciation expenditure.
A

T

46
Q
  1. (True or False). Credit is reflected on the balance sheet.
A

T

47
Q
  1. (True or False). Working capital and start-up costs can be depreciated.
A

F

48
Q
  1. (True or False). The difference between the original cost of a property and any depreciation charged up to that point is the salvage value.
A

F

49
Q
  1. (True or False). In straight line method, d represents the original investment in the property.
A

F

50
Q
  1. (True or False). If the ROI equals or exceeds the minimum acceptable rate of return mark, then the project offers an acceptable rate of return.
A

T

51
Q
  1. (True or False). A commonly used profitability standard is the minimum acceptable rate of return.
A

T

52
Q
  1. (True or False). PBP means Payback Process
A

F

53
Q
  1. (True or False). Any positive value for net return indicates that the cash flow to the project is greater than the amount necessary to repay the investment.
A

T

54
Q
  1. (True or False). If the net present worth is equal to zero, then the project provides a return
    does not match the discount rate.
A

F

55
Q
  1. The return obtained from an investment in which all investments and cash flows are discounted.
A

discounted cash flow rate of return (DCFR)

56
Q
  1. Each of these quantities represents the total amount obtained over the length of the evaluation period.
A

net return

57
Q
  1. Most basic way to record depreciation.
A

straight line method

58
Q

59.-61.3 examples of depreciable investments. (List alphabetically)

A

fixed-capital investment
physical facilities
utility services

59
Q

62.-64.3 main types of income (List alphabetically)

A

earned income
investment income
passive income

60
Q

65-67. Enumerate the Methods That Do Not Consider the Time Value of Money (List alphabetically)

A

net return
payback period
return of investment

61
Q

68.-69. Enumerate the Methods That Consider the Time Value of Money (List alphabetically)

A

discounted cash flow rate of return (DCFR)
net present worth

62
Q
  1. If the ROI __or__________the minimum acceptable rate of return mark, then the project offers an acceptable rate of return.
A

equals and exceed

63
Q

Borrowing cash from a bank would result in which of the following?

A

a. A debit to cash and a credit to notes payable.

64
Q

75.-77. Give the three elements in the basic accounting equation. (List Alphabetically) is the systematic presentation of all the transactions related to a particular head. usually include the tangible and intangible items your company owns.

A

asset
equity
liability

65
Q

. Accounts payable would be reported within

A

Balance sheet

66
Q

. ______ subfield of the larger field of accounting

A

financial accounting

67
Q

_______ most important financial statement in business.

A

balance sheet

68
Q

______ is the systematic presentation of all the transactions related to a particular head.

A

account

69
Q

. ______ can include the products or services a company purchases to help generate additional
income.

A

expense

69
Q

_____ usually include the tangible and intangible items your company owns.

A

asset

70
Q

81 record the amount of money a company earns from selling its products or services.

A

income

71
Q

82 can include items like outstanding debts, payment obligations to creditors and other upcoming payments.

A

liabilities

72
Q

83 show the value left in a company’s assets after it deducted its total liabilities to represent the current worth of the company.

A

equity

73
Q

```

~~~

84 graphical representation of a general ledger account.

A

T-acccount

74
Q
  1. Every financial transaction a debit entry should be made along with a credit entry to balance both sides of the account.
A

double entry system

75
Q
  1. Type of financial account used in accounting to record the inflow of funds or economic benefits resulting from the sale of goods, rendering of services, or other business activities.
A

income

76
Q
  1. Revenue you receive from your business’s main activities, like sales. If you own a landscaping company, your business’s operating revenue is derived from your services.
A

operating income

77
Q
  1. Money earned from a side activity that is unrelated to your business’s day-to-day activities, like dividend income or profits from investments.
A

non operating income

78
Q
  1. Set of numbered accounts a business uses to keep track of its financial transactions and to prepare financial reports.
A

general ledger

Techno Finals (4 decks)

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