Agec 340 Exam 3 Tamu Correct 100%

AGEC 340 EXAM 3 TAMU CORRECT
100%
Accounting Period - ANSWERthe period for which basic financial documents are
prepared

Gross Profit - ANSWERincome that remains to cover operating expenses

Income Before Taxes - ANSWERprofit/income left before income taxes have been
paid/deducted

Comparative Statement Analysis - ANSWERthe analysis that evaluates two periods
of balance sheets and income statements to examine the changes that could affect
the financial condition of the firm

Net Working Capital - ANSWERthe difference between current assets and current
liabilities

Balance Sheet - ANSWERa statement on the financial condition of a business on a
specific date; shows the values of the company's assets, liabilities, and owner's
equity

Assets - ANSWERsomething of value a firm owns or uses

Current Assets - ANSWERcash, account receivable, and inventory

Fixed Assets - ANSWERplant, property, and equipment

Liabilities - ANSWERobligations to pay debt

Owner's Equity - ANSWERalso known as net worth

Accounting Equation - ANSWERAssets = Liabilities + Owner's Equity

Retained Earnings - ANSWERprofits that are not paid out in dividends but are
reinvested in the firm itself

Income Statement - ANSWERalso known as a profit-and-loss statement;
summarizes the revenue and expenses of a business over a period of time


Sources of Net Working Capital - ANSWERprofit, sales of fixed assets, sales of
investments, long-term loans taken out, sale of stock, depreciation

Uses of Net Working Capital - ANSWERpayment of dividends, purchase of fixed
assets, purchase of investments, repayment of long-term loans, retirement of stock