FINANCIAL MANAGEMENT STUDY GUIDE
QUESTIONS AND ANSWERS 100%
CORRECT!!
, Accounts Payable - ANSWER the balance due to a creditor on a current account
Accounts Receivable - ANSWER a balance due from a debtor on a current account
Accrual Accounting - ANSWER Reporting both expenses and income during the fiscal
period in which it was incurred or earned.
Cash Accounting - ANSWER Method where receipts are recorded during the period
they are received, and expenses are recorded in the period in which they are actually
paid. small business use cash and corporations are required to use accrual accounting.
Acid Test Ratio - ANSWER quick ratio or liquid ratio measures the ability of a company
to use its near cash or quick assets to extinguish or retire its current liabilities
immediately
Amortiztion - ANSWER Paying off a debt with a fixed repayment schedule in regular
installments or a period of time. (ex. mortgage, or car loan) usually over the asset's
useful life. -- Interest vs. Principal
Asset - ANSWER the items on a balance sheet showing the book value of property
owned
Asset - Current - ANSWER assets of a short-term nature that are readily convertible to
cash
Asset- Fixed - ANSWER A long-term tangible piece of property that a firm owns and
uses in the production of its income and is not expected to be consumed or converted
into cash any sooner than at least one year's time.
Asset- Intangible - ANSWER An asset that is not physical in nature. Corporate
intellectual property (items such as patents, trademarks, copyrights, business
methodologies), goodwill and brand recognition are all common intangible assets in
today's marketplace.
Asset - Tanagible - ANSWER Assets that have a physical form. Tangible assets include
both fixed assets, such as machinery, buildings and land, and current assets, such as
inventory.
QUESTIONS AND ANSWERS 100%
CORRECT!!
, Accounts Payable - ANSWER the balance due to a creditor on a current account
Accounts Receivable - ANSWER a balance due from a debtor on a current account
Accrual Accounting - ANSWER Reporting both expenses and income during the fiscal
period in which it was incurred or earned.
Cash Accounting - ANSWER Method where receipts are recorded during the period
they are received, and expenses are recorded in the period in which they are actually
paid. small business use cash and corporations are required to use accrual accounting.
Acid Test Ratio - ANSWER quick ratio or liquid ratio measures the ability of a company
to use its near cash or quick assets to extinguish or retire its current liabilities
immediately
Amortiztion - ANSWER Paying off a debt with a fixed repayment schedule in regular
installments or a period of time. (ex. mortgage, or car loan) usually over the asset's
useful life. -- Interest vs. Principal
Asset - ANSWER the items on a balance sheet showing the book value of property
owned
Asset - Current - ANSWER assets of a short-term nature that are readily convertible to
cash
Asset- Fixed - ANSWER A long-term tangible piece of property that a firm owns and
uses in the production of its income and is not expected to be consumed or converted
into cash any sooner than at least one year's time.
Asset- Intangible - ANSWER An asset that is not physical in nature. Corporate
intellectual property (items such as patents, trademarks, copyrights, business
methodologies), goodwill and brand recognition are all common intangible assets in
today's marketplace.
Asset - Tanagible - ANSWER Assets that have a physical form. Tangible assets include
both fixed assets, such as machinery, buildings and land, and current assets, such as
inventory.
