BUSINESS 1000 FINAL EXAM WITH CORRECT ANSWERS
Accounting c- cCORRECT cANS✔✔A ccomprehensive csystem cfor ccollecting, canalyzing cand ccommunicating cfinancial cinformation.
cResults cin ca cset cof cfinancial cstatements.
Bookkeeping c- cCORRECT cANS✔✔The cfirst cstep cin caccounting. cRecording ctransactions.
Controller c- cCORRECT cANS✔✔Person cwho cmanages call cthe cfirms cactivities.Size cof cthe cdepartment cmotor cpeople cwork
cthere cand cthere care cmore ctitles.
Business cManagers c- cCORRECT cANS✔✔Need caccounting cto; cset cgoals c& cbudgets, cdevelop cplans, cevaluate copportunities.
c(internal)
Employees cand cunions c- cCORRECT cANS✔✔Need caccounting cto: cget cpaid, cto cplan cfor cand creceive cbenefits.
Investors cand ccreditors. c- cCORRECT cANS✔✔Different cpeople cwho cbuy cstocks, cthey ckeep ctabs cso cthey cknow cthe crisk.
cThey cestimate creturns, cfuture cgrowth c& ccredit crisk.
Taxing cauthorities c- cCORRECT cANS✔✔They cwant cto cknow cpeople care cremitting cthe cright ctaxes. cThey cplan cfor ctax cflow,
cdetermine ctax cliabilities cand caid cin ccollection. c(external)
Government cregulatory cagencies. c- cCORRECT cANS✔✔The cwatch cdogs cmaking csure cfinancial cstatements care cprepared
cproperly. cProtects cinvestors cinterests. c(external)
Financial cAccounting c- cCORRECT cANS✔✔Keeps cinterested cexternal cparties cinformed cabout cthe cfirm's cfinancial ccondition.
cEx: cwage ccost cfor cAir cCanada cfor c2016
Managerial cAccounting c- cCORRECT cANS✔✔Keeps cinternal cparies c(managers) cinformed cof chow cthe cfirm cis cdoing cfinancially.
cLooks cat cjust ca cpiece cof cthe ccompany. cEx: cwage ccost cfor cAtlantic cCanada.
Auditing c- cCORRECT cANS✔✔Examination cof cfinancial crecords cto censure cfair crepresentation cand cproper cprocedures. cLooks
cat cfinancial cstatements cfor c.
Forensic caccounting c- cCORRECT cANS✔✔Tracking cdown chidden cfunds cin cbusiness cfirms c(generally cpart cof can cinvestigation)
Tax cServices c- cCORRECT cANS✔✔Tax creturn cpreparation cand ctax cplanning.
Management cConsulting cServices. c- cCORRECT cANS✔✔From cpersonal cfinancial cplanning cto cbusiness cplanning. cUsed cto cdo
cspecial cprojects clike cmuskrat cfalls.
Private cAccountants. c- cCORRECT cANS✔✔Hired cas csalaried cemployees, cdeal cwith cday-to-day caccounting cneeds. cSmall
cbusiness cmay chave cjust cone, chowever clarge cbusiness' cmay chave cmany carea cspecialists.
Asset c- cCORRECT cANS✔✔Anything cof ceconomic cvalue cowned cby ca cfirm cor cindividual. cCan cbe cshort cterm cor clong cterm.
Liability c- cCORRECT cANS✔✔Any cdebt cowed cby ca cfirm cor can cindividual cto cothers. cCan cbe cshort cterm cor clong cterm.
Owners cEquity c- cCORRECT cANS✔✔Any cpositive cdifference cbetween ca cfirm's cassets cand cliabilities. coriginal cinvestments
cplus cprofit cearned cminus closses.
Balance cSheet c- cCORRECT cANS✔✔Firms cfinancial cposition cat cone cpoint cin ctime. c(assets, cliabilities, cowners cequity)
Income cStatement c- cCORRECT cANS✔✔Presents crevenues cand cexpenses cand cprofits cor closses cduring ca cperiod cor ctime.
cLooks cat chow cmanagement chas clooked cafter cthe cmoney.
Statement cof cCash cFlow c- cCORRECT cANS✔✔Presents cgeneration, cand cuse, cof ccash cduring ca cperiod cof ctime.
Current cAssets c- cCORRECT cANS✔✔Cash cand cassets cthat ccan cbe cconverted cinto ccash cwithin cthe cyear clisted cin corder cof
cliquidity.
, Accounts cReceivable c- cCORRECT cANS✔✔Invoices, cor camounts cowed cto cthe cfirm cby ccustomers.
Inventory c- cCORRECT cANS✔✔Costs cof cmerchandise cacquired cfor csale cbut cnot cyet csold.
Prepaid cexpenses c- cCORRECT cANS✔✔Supplies con chand cand crent c(other cbills) cpaid cfor ccoming cperiod.
Fixed cAssets c- cCORRECT cANS✔✔Have ca clong cterm cuse cor cvalue c(land, cbuilding, cmachinery)
Depreciation c- cCORRECT cANS✔✔distributing cthe ccost cof cmajor cassets cover clifetime, cdeducted cyearly.
Intangible cAssets c- cCORRECT cANS✔✔Patents, ctrademarks, ccopyrights, cfranchise cfees. cUntil cthey csell cyou cdon't cknow cwhat
cthey care cworth.
Current cLiabilities c- cCORRECT cANS✔✔Debts cowned cby cthe cfirm cthat cmust cbe crepaid cwithin cone cyear. c(accounts cpayable)
Long cTerm cLiabilities c- cCORRECT cANS✔✔Debts cowed cby cthe cfirm cand cdue cin cmore cthan cone cyear.
Retained cEarnings c- cCORRECT cANS✔✔Financing cby cretaining cprofits cin cthe cfirm cand cnot cpaying cdividends cto
cshareholders. cNet cprofit cless cdividends cpaid cto cshareholders.
Paid cIn cCapital c- cCORRECT cANS✔✔Money cinvested cby cowners.
Common cStock c- cCORRECT cANS✔✔Value cof cshares cin cthe ccompany.
Revenues c- cCORRECT cANS✔✔Monies creceived cby ca cfirm cas ca cresult cof c:selling cits cproduct cor cservice, creturn con
cinvestment, crent, clicensing cfees.
Revenue cRecognition c- cCORRECT cANS✔✔The cformal crecording cand creporting cof crevenues. cOccurs cwhen cthe csale cin
ccompleted, cproduct cdelivered cand cpaid cfor c(or ccredited)
Matching cPrinciple c- cCORRECT cANS✔✔States cthat cexpenses cwill cbe cmatched cwith crevenues cto cdetermine cnet cincome cfor
caccounting cperiod.
Cost cof cGood cSold c- cCORRECT cANS✔✔Expenses cdirectly cincurred cas ca cresult cof cproducing cor cselling ca cgood cor cservice
cin ca cgiven ctime cperiod. cGross cprofit= crevenues c- ccost cof cgoods csold
Operating cExpenses c- cCORRECT cANS✔✔All cother ccosts cof cdoing cbusiness cincluding csuppliers cand csalaries, cselling
cexpenses, cgeneral cand cadministrative cexpenses. cOperating cincome= cgross cprofit c- coperating cexpenses
Operations c- cCORRECT cANS✔✔Cash cfrom cbuying cand cselling cof cgoods cand cservices
Investing c- cCORRECT cANS✔✔Cash cfrom cinvestment cactivities. cEx: cbonds, cstocks, cproperty, cequipment.
Financing c- cCORRECT cANS✔✔Cash cfrom cfinancing cactivities. cEx: cdividends, cborrowing cor cissuing cstocks, crepayments cor
cborrowings.
The cBudget c- cCORRECT cANS✔✔Detailed cfinancial cplan cfor cestimated creceipts cand cexpenditures cfor cfuture cperiod cof ctime.
can cinternal cfinancial cstatement cfor cusually conly cone cyear.
Analyzing cFinancial cStatements c- cCORRECT cANS✔✔Key cratios care cused cto cinterpret cand ccompare cresults cof cfinancial
cstatements cfor cfirms cand cor cindustries.
Solvency c- cCORRECT cANS✔✔Short cterm cand clong. cterm, cmeasures crisk.
Profitability c- cCORRECT cANS✔✔Measures cpotential cearnings.
Short cterm csolvency cratios c- cCORRECT cANS✔✔Measures cthe ccompany's cliquidity cand cits cability cto cmeet ccurrent cobligations
cout cof ccurrent cassets. cHigh cratio c= clower crisk cof cinability. cWant cthe ccurrent cratio cto cbe cbetter cthan c1.25. cCurrent cratio c=
ccurrent cassets/current cliabilities.
Long cterm csolvency cratios c- cCORRECT cANS✔✔Measure cthe ccompany's cability cto cpay clong cterm cdebts. chigh cratio c=
cgreater cthe crisk cof cinability cto cpay. calso cknow cas cdebt cratios. cwant cratio cto cbe cbetter cthan c1. cDebt cto cowners cequity cratio=
cdebt/ cowners cequity.
Profitabilty cratios c- cCORRECT cANS✔✔Measures coverall ccompany cprofitability cfor cpotential cinvestors. chigh catop c= cmore
cprofitable.
earning cper cshare c= c- cCORRECT cANS✔✔Net cincome c/ c# cof coutstanding cshares
Return con cequity c= c- cCORRECT cANS✔✔Net cincome c/ ctotal cowners cequity
Activity cRatio c- cCORRECT cANS✔✔Measures chow cefficiently cthe ccompany cuses cit cresources. chigh cratio c= cmore cefficient.
ccompare cto cfirms cin csame cindustry,
Accounting c- cCORRECT cANS✔✔A ccomprehensive csystem cfor ccollecting, canalyzing cand ccommunicating cfinancial cinformation.
cResults cin ca cset cof cfinancial cstatements.
Bookkeeping c- cCORRECT cANS✔✔The cfirst cstep cin caccounting. cRecording ctransactions.
Controller c- cCORRECT cANS✔✔Person cwho cmanages call cthe cfirms cactivities.Size cof cthe cdepartment cmotor cpeople cwork
cthere cand cthere care cmore ctitles.
Business cManagers c- cCORRECT cANS✔✔Need caccounting cto; cset cgoals c& cbudgets, cdevelop cplans, cevaluate copportunities.
c(internal)
Employees cand cunions c- cCORRECT cANS✔✔Need caccounting cto: cget cpaid, cto cplan cfor cand creceive cbenefits.
Investors cand ccreditors. c- cCORRECT cANS✔✔Different cpeople cwho cbuy cstocks, cthey ckeep ctabs cso cthey cknow cthe crisk.
cThey cestimate creturns, cfuture cgrowth c& ccredit crisk.
Taxing cauthorities c- cCORRECT cANS✔✔They cwant cto cknow cpeople care cremitting cthe cright ctaxes. cThey cplan cfor ctax cflow,
cdetermine ctax cliabilities cand caid cin ccollection. c(external)
Government cregulatory cagencies. c- cCORRECT cANS✔✔The cwatch cdogs cmaking csure cfinancial cstatements care cprepared
cproperly. cProtects cinvestors cinterests. c(external)
Financial cAccounting c- cCORRECT cANS✔✔Keeps cinterested cexternal cparties cinformed cabout cthe cfirm's cfinancial ccondition.
cEx: cwage ccost cfor cAir cCanada cfor c2016
Managerial cAccounting c- cCORRECT cANS✔✔Keeps cinternal cparies c(managers) cinformed cof chow cthe cfirm cis cdoing cfinancially.
cLooks cat cjust ca cpiece cof cthe ccompany. cEx: cwage ccost cfor cAtlantic cCanada.
Auditing c- cCORRECT cANS✔✔Examination cof cfinancial crecords cto censure cfair crepresentation cand cproper cprocedures. cLooks
cat cfinancial cstatements cfor c.
Forensic caccounting c- cCORRECT cANS✔✔Tracking cdown chidden cfunds cin cbusiness cfirms c(generally cpart cof can cinvestigation)
Tax cServices c- cCORRECT cANS✔✔Tax creturn cpreparation cand ctax cplanning.
Management cConsulting cServices. c- cCORRECT cANS✔✔From cpersonal cfinancial cplanning cto cbusiness cplanning. cUsed cto cdo
cspecial cprojects clike cmuskrat cfalls.
Private cAccountants. c- cCORRECT cANS✔✔Hired cas csalaried cemployees, cdeal cwith cday-to-day caccounting cneeds. cSmall
cbusiness cmay chave cjust cone, chowever clarge cbusiness' cmay chave cmany carea cspecialists.
Asset c- cCORRECT cANS✔✔Anything cof ceconomic cvalue cowned cby ca cfirm cor cindividual. cCan cbe cshort cterm cor clong cterm.
Liability c- cCORRECT cANS✔✔Any cdebt cowed cby ca cfirm cor can cindividual cto cothers. cCan cbe cshort cterm cor clong cterm.
Owners cEquity c- cCORRECT cANS✔✔Any cpositive cdifference cbetween ca cfirm's cassets cand cliabilities. coriginal cinvestments
cplus cprofit cearned cminus closses.
Balance cSheet c- cCORRECT cANS✔✔Firms cfinancial cposition cat cone cpoint cin ctime. c(assets, cliabilities, cowners cequity)
Income cStatement c- cCORRECT cANS✔✔Presents crevenues cand cexpenses cand cprofits cor closses cduring ca cperiod cor ctime.
cLooks cat chow cmanagement chas clooked cafter cthe cmoney.
Statement cof cCash cFlow c- cCORRECT cANS✔✔Presents cgeneration, cand cuse, cof ccash cduring ca cperiod cof ctime.
Current cAssets c- cCORRECT cANS✔✔Cash cand cassets cthat ccan cbe cconverted cinto ccash cwithin cthe cyear clisted cin corder cof
cliquidity.
, Accounts cReceivable c- cCORRECT cANS✔✔Invoices, cor camounts cowed cto cthe cfirm cby ccustomers.
Inventory c- cCORRECT cANS✔✔Costs cof cmerchandise cacquired cfor csale cbut cnot cyet csold.
Prepaid cexpenses c- cCORRECT cANS✔✔Supplies con chand cand crent c(other cbills) cpaid cfor ccoming cperiod.
Fixed cAssets c- cCORRECT cANS✔✔Have ca clong cterm cuse cor cvalue c(land, cbuilding, cmachinery)
Depreciation c- cCORRECT cANS✔✔distributing cthe ccost cof cmajor cassets cover clifetime, cdeducted cyearly.
Intangible cAssets c- cCORRECT cANS✔✔Patents, ctrademarks, ccopyrights, cfranchise cfees. cUntil cthey csell cyou cdon't cknow cwhat
cthey care cworth.
Current cLiabilities c- cCORRECT cANS✔✔Debts cowned cby cthe cfirm cthat cmust cbe crepaid cwithin cone cyear. c(accounts cpayable)
Long cTerm cLiabilities c- cCORRECT cANS✔✔Debts cowed cby cthe cfirm cand cdue cin cmore cthan cone cyear.
Retained cEarnings c- cCORRECT cANS✔✔Financing cby cretaining cprofits cin cthe cfirm cand cnot cpaying cdividends cto
cshareholders. cNet cprofit cless cdividends cpaid cto cshareholders.
Paid cIn cCapital c- cCORRECT cANS✔✔Money cinvested cby cowners.
Common cStock c- cCORRECT cANS✔✔Value cof cshares cin cthe ccompany.
Revenues c- cCORRECT cANS✔✔Monies creceived cby ca cfirm cas ca cresult cof c:selling cits cproduct cor cservice, creturn con
cinvestment, crent, clicensing cfees.
Revenue cRecognition c- cCORRECT cANS✔✔The cformal crecording cand creporting cof crevenues. cOccurs cwhen cthe csale cin
ccompleted, cproduct cdelivered cand cpaid cfor c(or ccredited)
Matching cPrinciple c- cCORRECT cANS✔✔States cthat cexpenses cwill cbe cmatched cwith crevenues cto cdetermine cnet cincome cfor
caccounting cperiod.
Cost cof cGood cSold c- cCORRECT cANS✔✔Expenses cdirectly cincurred cas ca cresult cof cproducing cor cselling ca cgood cor cservice
cin ca cgiven ctime cperiod. cGross cprofit= crevenues c- ccost cof cgoods csold
Operating cExpenses c- cCORRECT cANS✔✔All cother ccosts cof cdoing cbusiness cincluding csuppliers cand csalaries, cselling
cexpenses, cgeneral cand cadministrative cexpenses. cOperating cincome= cgross cprofit c- coperating cexpenses
Operations c- cCORRECT cANS✔✔Cash cfrom cbuying cand cselling cof cgoods cand cservices
Investing c- cCORRECT cANS✔✔Cash cfrom cinvestment cactivities. cEx: cbonds, cstocks, cproperty, cequipment.
Financing c- cCORRECT cANS✔✔Cash cfrom cfinancing cactivities. cEx: cdividends, cborrowing cor cissuing cstocks, crepayments cor
cborrowings.
The cBudget c- cCORRECT cANS✔✔Detailed cfinancial cplan cfor cestimated creceipts cand cexpenditures cfor cfuture cperiod cof ctime.
can cinternal cfinancial cstatement cfor cusually conly cone cyear.
Analyzing cFinancial cStatements c- cCORRECT cANS✔✔Key cratios care cused cto cinterpret cand ccompare cresults cof cfinancial
cstatements cfor cfirms cand cor cindustries.
Solvency c- cCORRECT cANS✔✔Short cterm cand clong. cterm, cmeasures crisk.
Profitability c- cCORRECT cANS✔✔Measures cpotential cearnings.
Short cterm csolvency cratios c- cCORRECT cANS✔✔Measures cthe ccompany's cliquidity cand cits cability cto cmeet ccurrent cobligations
cout cof ccurrent cassets. cHigh cratio c= clower crisk cof cinability. cWant cthe ccurrent cratio cto cbe cbetter cthan c1.25. cCurrent cratio c=
ccurrent cassets/current cliabilities.
Long cterm csolvency cratios c- cCORRECT cANS✔✔Measure cthe ccompany's cability cto cpay clong cterm cdebts. chigh cratio c=
cgreater cthe crisk cof cinability cto cpay. calso cknow cas cdebt cratios. cwant cratio cto cbe cbetter cthan c1. cDebt cto cowners cequity cratio=
cdebt/ cowners cequity.
Profitabilty cratios c- cCORRECT cANS✔✔Measures coverall ccompany cprofitability cfor cpotential cinvestors. chigh catop c= cmore
cprofitable.
earning cper cshare c= c- cCORRECT cANS✔✔Net cincome c/ c# cof coutstanding cshares
Return con cequity c= c- cCORRECT cANS✔✔Net cincome c/ ctotal cowners cequity
Activity cRatio c- cCORRECT cANS✔✔Measures chow cefficiently cthe ccompany cuses cit cresources. chigh cratio c= cmore cefficient.
ccompare cto cfirms cin csame cindustry,
