Understanding Accounting and Financial Information (17 L.S.) Flashcards
Chapter 17 L.S.
The Red Cross in a non-profit which would most likely require the services of which type of accountant?
Public or private accountant
Financial ____ such as income statements and balance sheets indicate a firm’s financial heath and stability.
Statements
What are some benefits of using computers for accounting purposes?
- Software can help if no strong accounting support is available
- Information can be posted from journals instantaneously
- Computers can handle large amounts of financial information
List the steps in the accounting cycle from the beginning to end.
1- Analyze source documents --Sales slips, travel records, ext. 2-Record transactions in journals 3-Transfer (post) journal entries to ledger 4-Take a trail balance 5-Prepare financial statements -Balance Sheet -Income Statement -Statement of cash flows 6-Analyze financial statements
The ____ ____ is the yearly statement of the firm’s financial condition, progress, and expectations provided to the stakeholders.
Annual Report
The formula for the costs of goods sold is:
Purchase Price + freight charges + storage costs
Accounting
Classifying, summarizing, interpreting, and reporting
Bookkeeping
Recording
Accounting cycle
Series of six steps: 1- Analyze source documents --Sales slips, travel records, ext. 2-Record transactions in journals 3-Transfer (post) journal entries to ledger 4-Take a trail balance 5-Prepare financial statements -Balance Sheet -Income Statement -Statement of cash flows 6-Analyze financial statements
Trial balance
Summary of dada in ledgers
Advantages of using computers to maintain and compile accounting information:
- Speed
- Handle large amounts of data
Which is an example of an accounting software package:
- Excel
- DecisionTree
- MRP
- Quickbooks
Quickbooks
Accounting provides ____ _____ that are critical to understanding the health of a business.
financial statements
Which will be found on an income statement:
- operating expenses
- assets
- net income
- liabilities
- cost of goods sold
- revenue
-operating expenses
-net income
-cost of goods sold
-revenue
NOT
-assets
-liabilities
Net income or Net loss
Resources (revenue) left over or depleted
Income statement
a financial statement that shows a firm’s bottom line - that is, its profit after costs, expenses, and taxes
The statement of cash flows is a financial statement that shows…
Cash receipts and disbursements
Statement of cash flows consists of three major activities:
Operations
-transactions that will be done/finished within the year
Investments
-Cash used for investing activities
Financing
-taking on new debt, equity capital to pay business expenses, past debts, company dividends
The Financial Accounting ____ _____ defines the generally accepted accounting principles.
Financial Accounting Standards Board (FASB)
Computerized _____ programs post information from journals instantaneously so that financial information is readily available.
Accounting
Which of the following is considered to be a part of accounting?
- Classifying financial transactions
- Changing financial transactions
- Interpreting financial transactions
- Recording financial transactions
-Classifying, interpreting, recording, and summarizing financial transactions
The ____ line is another name for net income after taxes.
Bottom
Financial statement that shows the firm’s profit after costs, expenses, and taxes.
Income statement
Type of ratio that measures how effectively a firm is using its various resources to achieve profits.
Profitability
