ENTR 460 Test Latest Update
GAAP - Answer guidelines that set out the manner and form for presenting accounting
information
accrual accounting - Answer the practice of recording economic activity when
recognized rather than waiting until realized
depreciation - Answer reduction in value of a fixed asset over its expected life intended
to reflect the usage of wearing out the asset
accumulated depreciation - Answer The sum of all the depreciation amounts charged to
fixed assets
balance sheet - Answer financial statement that provides a snapshot of a venture's
financial position as of a specific date
balance sheet equation - Answer total assets= total liabilities + owners equity
assets - Answer financial, physical, and intangible items owned or controlled by the
business
listing order of assets - Answer assets are listed in declining order of liquidity, or how
quickly the asset can be converted into cash
liabilities order - Answer short-term liabilities are listed first followed by long-term debts
owed by the venture
owners equity - Answer equity capital contributed by the owners of the venture is shown
after listing all liabilities
current assets - Answer cash and other assets that are expected to be converted into
cash in less than one year
fixed assets - Answer assets with expected lives of greater than one year
types of current assets - Answer cash, receivables, inventories
cash - Answer amount of coin, currency, and checking account balances
receivables - Answer credit sales made to customers
inventories - Answer raw materials, work-in-progress, and finished products which the
venture hopes to sell
types of current liabilities - Answer payables, accrued wages, and bank loans
payables - Answer short-term liabilities owed to suppliers for purchases made on credit
accrued wages - Answer liabilities owed to employees for previously completed work
, bank loan - Answer interest-bearing loan of one year or less from a commercial bank
types of long-term liabilities - Answer long term debts and capital leases
long-term debts - Answer loans that have maturities of longer than one year
capital leases - Answer long-term, noncancelables leases whereby the owner receives
payments that cover the cost of the equipment plus a return on investment in the
equipment
operating leases - Answer provide maintenance in addition to financing and are usually
canclable
what are often financed through operating leases? - Answer computers, copiers, and
automobiles
balance sheet impact for operating leases - Answer no assets or lease liabilities are
recorded on the balance sheet
income statement - Answer financial statement that reports the revenues generated and
expenses incurred over an accounting period
sales or revenues - Answer funds earned from selling a product or providing a service
gross earnings - Answer net sales (after deducting returns and allowances) minus the
cost of production
operating income or earnings before interest and taxes (EBIT) - Answer indicates a
firms profit after operating expenses, excluding financing costs have been deducted
from net sales
net income (or profit) - Answer bottom line measure after all operating expenses,
financing costs, and taxes have been deducted from net sales
cost of production schedule - Answer important for preparing the income statement
cost of goods sold schedule - Answer important for preparing the income statement
inventories schedule - Answer important for preparing the balance sheet
statement of cash flows - Answer shows how cash, reflected in accrual accounting,
flowed into and out of a firm during a specific period of operation
when does net cash burn occur - Answer when the sum of cash flows from "operations"
and "investing" is negative
variable expenses - Answer costs or expenses that vary directly with revenues
fixed expenses - Answer costs that are expected to remain constant over a range of
revenues for a specific time period
GAAP - Answer guidelines that set out the manner and form for presenting accounting
information
accrual accounting - Answer the practice of recording economic activity when
recognized rather than waiting until realized
depreciation - Answer reduction in value of a fixed asset over its expected life intended
to reflect the usage of wearing out the asset
accumulated depreciation - Answer The sum of all the depreciation amounts charged to
fixed assets
balance sheet - Answer financial statement that provides a snapshot of a venture's
financial position as of a specific date
balance sheet equation - Answer total assets= total liabilities + owners equity
assets - Answer financial, physical, and intangible items owned or controlled by the
business
listing order of assets - Answer assets are listed in declining order of liquidity, or how
quickly the asset can be converted into cash
liabilities order - Answer short-term liabilities are listed first followed by long-term debts
owed by the venture
owners equity - Answer equity capital contributed by the owners of the venture is shown
after listing all liabilities
current assets - Answer cash and other assets that are expected to be converted into
cash in less than one year
fixed assets - Answer assets with expected lives of greater than one year
types of current assets - Answer cash, receivables, inventories
cash - Answer amount of coin, currency, and checking account balances
receivables - Answer credit sales made to customers
inventories - Answer raw materials, work-in-progress, and finished products which the
venture hopes to sell
types of current liabilities - Answer payables, accrued wages, and bank loans
payables - Answer short-term liabilities owed to suppliers for purchases made on credit
accrued wages - Answer liabilities owed to employees for previously completed work
, bank loan - Answer interest-bearing loan of one year or less from a commercial bank
types of long-term liabilities - Answer long term debts and capital leases
long-term debts - Answer loans that have maturities of longer than one year
capital leases - Answer long-term, noncancelables leases whereby the owner receives
payments that cover the cost of the equipment plus a return on investment in the
equipment
operating leases - Answer provide maintenance in addition to financing and are usually
canclable
what are often financed through operating leases? - Answer computers, copiers, and
automobiles
balance sheet impact for operating leases - Answer no assets or lease liabilities are
recorded on the balance sheet
income statement - Answer financial statement that reports the revenues generated and
expenses incurred over an accounting period
sales or revenues - Answer funds earned from selling a product or providing a service
gross earnings - Answer net sales (after deducting returns and allowances) minus the
cost of production
operating income or earnings before interest and taxes (EBIT) - Answer indicates a
firms profit after operating expenses, excluding financing costs have been deducted
from net sales
net income (or profit) - Answer bottom line measure after all operating expenses,
financing costs, and taxes have been deducted from net sales
cost of production schedule - Answer important for preparing the income statement
cost of goods sold schedule - Answer important for preparing the income statement
inventories schedule - Answer important for preparing the balance sheet
statement of cash flows - Answer shows how cash, reflected in accrual accounting,
flowed into and out of a firm during a specific period of operation
when does net cash burn occur - Answer when the sum of cash flows from "operations"
and "investing" is negative
variable expenses - Answer costs or expenses that vary directly with revenues
fixed expenses - Answer costs that are expected to remain constant over a range of
revenues for a specific time period
