Mod 2 Business

Question 1

Accounting

Answer 1

The process of collecting, analyzing, and reporting financial information

Question 2

Managerial Accounting

Answer 2

Provides information for managers within an organization to make decisions about a company’s financing, investing, marketing, and operating activities

Question 3

Financial Accounting

Answer 3

Provides information for people outside an organization through the generation of standardizing financial statements

Question 4

Generally Accepted Accounting Principle (GAAP)

Answer 4

The financial accounting rules, standards, and usual practices followed by accountants in Canada when preparing financial statements until Jan 2011

Question 5

International Financial Reporting Standards (IFRS)

Answer 5

A set of globally accepted accounting standards adopted in Canada on Jan 1 2011 for public companies and those private companies that chose of adopt them

Question 6

Accounting Standards for Private Enterprises (ASPE)

Answer 6

Accounting standards similar to the former Canadian GAPP for provide privates companies (Unless the private companies choose to use IFRS)

Question 7

Balance Sheet (or Statement of Financial Position)

Answer 7

A financial statement that provides a snapshot of a company’s financial position by stating assets, liabilities, and owner’s equity

Question 8

Income Statement (or statement of income)

Answer 8

A financial statement that provides a summary of how much a company earned over a period of time; summarizes revenue, expenses, and net income (or loss)

Question 9

Statement of Cash Flows (or Cash Flow Statement)

Answer 9

A financial statement that illustrates how the company’s operating, investing, and financing activities affect cash over a period of time

Question 10

Cost Of Goods Sold (COGS)

Answer 10

The cost of producing or purchasing products for sale; typically varies directly with sales volume or production volume

Question 11

Operating Expense

Answer 11

Ongoing business expenses such as rent, salaries, utilities, and marketing expenses’ these often do not change in direct relation to changes in sales volume

Question 12

Financial Ratio

Answer 12

A number that shows the relationship between 2 elements of a company’s financial statements; allows for a fairer comparison between current financial results and results form previous periods or industry

Question 13

Return On Sales

Answer 13

A financial ratio that measures profitability by dividing net income by revenue

Question 14

Current Ratio

Answer 14

A financial ratio that measures liquidity by dividing current assets by current liabilities

Question 15

Debt-To-Equity Ratio

Answer 15

A financial ratio that measures leverage by dividing total liabilities by owners’ equity

Question 16

Barter

Answer 16

A system of exchange in which goods or services are traded directly for other goods and services

Question 17

Money

Answer 17

Anything a society uses to purchase products or resouces

Question 18

Currency

Answer 18

Bank notes and coins used as a medium of exchange

Question 19

Demand Deposits

Answer 19

Money stored in chequing accounts that depositors can withdraw on demand

Question 20

Time Deposits

Answer 20

Money invested for a specific time

Question 21

M1

Answer 21

A measure of money supply that essential consists of currency and chequing accounts

Question 22

M2

Answer 22

A measure of money supply that consists of M1 plus saving accounts and some other types of time-based deposit accounts

Question 23

M3

Answer 23

A measure of money that includes M2 plus Canadian residents’ foreign currency deposits and non-personal deposit

Question 24

Term Deposits

Answer 24

Deposits at a bank or other financial institution that pay interests but cannot be withdrawn on demand

Question 25

Deflation

Answer 25

A decrease of prices in an economy over time

Question 26

Inflation

Answer 26

An increase of prices in an economy over time

Question 27

Bank of Canada

Answer 27

The central bank of Canada that, among other functions, is responsible for regulating money supply

Question 28

Open Market Operations

Answer 28

The purchase or slae of Canadian government securities by the Bank of Canada to stimulate or slow down the economy

Question 29

Overnight Rate

Answer 29

The interest rate that our major financial institutions borrow from each other “overnight”

Question 30

Target For The Overnight Rate

Answer 30

The signal to the major participants in the money market as to what the Bank of Canada is aiming for when participants borrow and lend one-day funds to each other

Question 31

Financial Intermediation

Answer 31

When financial institutions act as intermediaries between lenders and borrowers of funds

Question 32

Offical of the Superintendent of Financial Institutions (OSFI)

Answer 32

An independent agency of the Government of Canada that regulates federally registered banks, insures, and trust and loan companies as well as credit unions, fraternal benefits societies, and private pension plans

Question 33

Canda Deposit Insurance Corporation (CDIC)

Answer 33

A federal Crown Corporation created in 1967 to provide deposit insurance and contribute to the stability of Canada’s financial system