BUSINESS 1000 FINAL EXAM CORRECT
Accounting - ANSWER A comprehensive system for collecting, analyzing and
communicating financial information. Results in a set of financial statements.
Bookkeeping - ANSWER The first step in accounting. Recording transactions.
Controller - ANSWER Person who manages all the firms activities.Size of the
department motor people work there and there are more titles.
Business Managers - ANSWER Need accounting to; set goals & budgets, develop
plans, evaluate opportunities. (internal)
Employees and unions - ANSWER Need accounting to: get paid, to plan for and receive
benefits.
Investors and creditors. - ANSWER Different people who buy stocks, they keep tabs so
they know the risk. They estimate returns, future growth & credit risk.
Taxing authorities - ANSWER They want to know people are remitting the right taxes.
They plan for tax flow, determine tax liabilities and aid in collection. (external)
Government regulatory agencies. - ANSWER The watch dogs making sure financial
statements are prepared properly. Protects investors interests. (external)
Financial Accounting - ANSWER Keeps interested external parties informed about the
firm's financial condition. Ex: wage cost for Air Canada for 2016
Managerial Accounting - ANSWER Keeps internal paries (managers) informed of how
the firm is doing financially. Looks at just a piece of the company. Ex: wage cost for
Atlantic Canada.
Auditing - ANSWER Examination of financial records to ensure fair representation and
proper procedures. Looks at financial statements for .
Forensic accounting - ANSWER Tracking down hidden funds in business firms
(generally part of an investigation)
Tax Services - ANSWER Tax return preparation and tax planning.
Management Consulting Services. - ANSWER From personal financial planning to
business planning. Used to do special projects like muskrat falls.
, Private Accountants. - ANSWER Hired as salaried employees, deal with day-to-day
accounting needs. Small business may have just one, however large business' may
have many area specialists.
Operating Expenses - ANSWER All other costs of doing business including suppliers
and salaries, selling expenses, general and administrative expenses. Operating
income= gross profit - operating expenses
Operations - ANSWER Cash from buying and selling of goods and services
Investing - ANSWER Cash from investment activities. Ex: bonds, stocks, property,
equipment.
Financing - ANSWER Cash from financing activities. Ex: dividends, borrowing or issuing
stocks, repayments or borrowings.
The Budget - ANSWER Detailed financial plan for estimated receipts and expenditures
for future period of time. an internal financial statement for usually only one year.
Analyzing Financial Statements - ANSWER Key ratios are used to interpret and
compare results of financial statements for firms and or industries.
Solvency - ANSWER Short term and long. term, measures risk.
Profitability - ANSWER Measures potential earnings.
Short term solvency ratios - ANSWER Measures the company's liquidity and its ability to
meet current obligations out of current assets. High ratio = lower risk of inability. Want
the current ratio to be better than 1.25. Current ratio = current assets/current liabilities.
Long term solvency ratios - ANSWER Measure the company's ability to pay long term
debts. high ratio = greater the risk of inability to pay. also know as debt ratios. want ratio
to be better than 1. Debt to owners equity ratio= debt/ owners equity.
Profitabilty ratios - ANSWER Measures overall company profitability for potential
investors. high atop = more profitable.
earning per share = - ANSWER Net income / # of outstanding shares
Return on equity = - ANSWER Net income / total owners equity
Activity Ratio - ANSWER Measures how efficiently the company uses it resources. high
ratio = more efficient. compare to firms in same industry,
Accounting - ANSWER A comprehensive system for collecting, analyzing and
communicating financial information. Results in a set of financial statements.
Bookkeeping - ANSWER The first step in accounting. Recording transactions.
Controller - ANSWER Person who manages all the firms activities.Size of the
department motor people work there and there are more titles.
Business Managers - ANSWER Need accounting to; set goals & budgets, develop
plans, evaluate opportunities. (internal)
Employees and unions - ANSWER Need accounting to: get paid, to plan for and receive
benefits.
Investors and creditors. - ANSWER Different people who buy stocks, they keep tabs so
they know the risk. They estimate returns, future growth & credit risk.
Taxing authorities - ANSWER They want to know people are remitting the right taxes.
They plan for tax flow, determine tax liabilities and aid in collection. (external)
Government regulatory agencies. - ANSWER The watch dogs making sure financial
statements are prepared properly. Protects investors interests. (external)
Financial Accounting - ANSWER Keeps interested external parties informed about the
firm's financial condition. Ex: wage cost for Air Canada for 2016
Managerial Accounting - ANSWER Keeps internal paries (managers) informed of how
the firm is doing financially. Looks at just a piece of the company. Ex: wage cost for
Atlantic Canada.
Auditing - ANSWER Examination of financial records to ensure fair representation and
proper procedures. Looks at financial statements for .
Forensic accounting - ANSWER Tracking down hidden funds in business firms
(generally part of an investigation)
Tax Services - ANSWER Tax return preparation and tax planning.
Management Consulting Services. - ANSWER From personal financial planning to
business planning. Used to do special projects like muskrat falls.
, Private Accountants. - ANSWER Hired as salaried employees, deal with day-to-day
accounting needs. Small business may have just one, however large business' may
have many area specialists.
Operating Expenses - ANSWER All other costs of doing business including suppliers
and salaries, selling expenses, general and administrative expenses. Operating
income= gross profit - operating expenses
Operations - ANSWER Cash from buying and selling of goods and services
Investing - ANSWER Cash from investment activities. Ex: bonds, stocks, property,
equipment.
Financing - ANSWER Cash from financing activities. Ex: dividends, borrowing or issuing
stocks, repayments or borrowings.
The Budget - ANSWER Detailed financial plan for estimated receipts and expenditures
for future period of time. an internal financial statement for usually only one year.
Analyzing Financial Statements - ANSWER Key ratios are used to interpret and
compare results of financial statements for firms and or industries.
Solvency - ANSWER Short term and long. term, measures risk.
Profitability - ANSWER Measures potential earnings.
Short term solvency ratios - ANSWER Measures the company's liquidity and its ability to
meet current obligations out of current assets. High ratio = lower risk of inability. Want
the current ratio to be better than 1.25. Current ratio = current assets/current liabilities.
Long term solvency ratios - ANSWER Measure the company's ability to pay long term
debts. high ratio = greater the risk of inability to pay. also know as debt ratios. want ratio
to be better than 1. Debt to owners equity ratio= debt/ owners equity.
Profitabilty ratios - ANSWER Measures overall company profitability for potential
investors. high atop = more profitable.
earning per share = - ANSWER Net income / # of outstanding shares
Return on equity = - ANSWER Net income / total owners equity
Activity Ratio - ANSWER Measures how efficiently the company uses it resources. high
ratio = more efficient. compare to firms in same industry,
