AGEC 340 Exam 3 TAMU Questions With
Correct Answers
Accounting |Period |- |CORRECT |ANSWER✔✔-the |period |for |which |basic |financial |documents |are
|prepared
Balance |Sheet |- |CORRECT |ANSWER✔✔-a |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 |- |CORRECT |ANSWER✔✔-something |of |value |a |firm |owns |or |uses
Current |Assets |- |CORRECT |ANSWER✔✔-cash, |account |receivable, |and |inventory
Fixed |Assets |- |CORRECT |ANSWER✔✔-plant, |property, |and |equipment
Liabilities |- |CORRECT |ANSWER✔✔-obligations |to |pay |debt
Owner's |Equity |- |CORRECT |ANSWER✔✔-also |known |as |net |worth
Accounting |Equation |- |CORRECT |ANSWER✔✔-Assets |= |Liabilities |+ |Owner's |Equity
Retained |Earnings |- |CORRECT |ANSWER✔✔-profits |that |are |not |paid |out |in |dividends |but |are |
reinvested |in |the |firm |itself
Income |Statement |- |CORRECT |ANSWER✔✔-also |known |as |a |profit-and-loss |statement; |
summarizes |the |revenue |and |expenses |of |a |business |over |a |period |of |time
, Gross |Profit |- |CORRECT |ANSWER✔✔-income |that |remains |to |cover |operating |expenses
Income |Before |Taxes |- |CORRECT |ANSWER✔✔-profit/income |left |before |income |taxes |have |
been |paid/deducted
Comparative |Statement |Analysis |- |CORRECT |ANSWER✔✔-the |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 |- |CORRECT |ANSWER✔✔-the |difference |between |current |assets |and |
current |liabilities
Sources |of |Net |Working |Capital |- |CORRECT |ANSWER✔✔-profit, |sales |of |fixed |assets, |sales |of |
investments, |long-term |loans |taken |out, |sale |of |stock, |depreciation
Uses |of |Net |Working |Capital |- |CORRECT |ANSWER✔✔-payment |of |dividends, |purchase |of |fixed |
assets, |purchase |of |investments, |repayment |of |long-term |loans, |retirement |of |stock
Liquidity |Ratios |- |CORRECT |ANSWER✔✔-measure |the |ability |to |meet |the |day-to-day |cash |
needs |of |the |firm
Solvency |Ratios |- |CORRECT |ANSWER✔✔-the |ability |to |repay |the |money |loaned |if |the |firm |
stopped |doing |business |today
Activity |Ratios |- |CORRECT |ANSWER✔✔-measure |the |level |of |activity |of |the |business |relative |to
|its |inventory |levels, |customer |credit |payments, |and |its |own |bill |paying
Profitability |Ratios |- |CORRECT |ANSWER✔✔-measure |the |ability |to |generate |profits
Correct Answers
Accounting |Period |- |CORRECT |ANSWER✔✔-the |period |for |which |basic |financial |documents |are
|prepared
Balance |Sheet |- |CORRECT |ANSWER✔✔-a |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 |- |CORRECT |ANSWER✔✔-something |of |value |a |firm |owns |or |uses
Current |Assets |- |CORRECT |ANSWER✔✔-cash, |account |receivable, |and |inventory
Fixed |Assets |- |CORRECT |ANSWER✔✔-plant, |property, |and |equipment
Liabilities |- |CORRECT |ANSWER✔✔-obligations |to |pay |debt
Owner's |Equity |- |CORRECT |ANSWER✔✔-also |known |as |net |worth
Accounting |Equation |- |CORRECT |ANSWER✔✔-Assets |= |Liabilities |+ |Owner's |Equity
Retained |Earnings |- |CORRECT |ANSWER✔✔-profits |that |are |not |paid |out |in |dividends |but |are |
reinvested |in |the |firm |itself
Income |Statement |- |CORRECT |ANSWER✔✔-also |known |as |a |profit-and-loss |statement; |
summarizes |the |revenue |and |expenses |of |a |business |over |a |period |of |time
, Gross |Profit |- |CORRECT |ANSWER✔✔-income |that |remains |to |cover |operating |expenses
Income |Before |Taxes |- |CORRECT |ANSWER✔✔-profit/income |left |before |income |taxes |have |
been |paid/deducted
Comparative |Statement |Analysis |- |CORRECT |ANSWER✔✔-the |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 |- |CORRECT |ANSWER✔✔-the |difference |between |current |assets |and |
current |liabilities
Sources |of |Net |Working |Capital |- |CORRECT |ANSWER✔✔-profit, |sales |of |fixed |assets, |sales |of |
investments, |long-term |loans |taken |out, |sale |of |stock, |depreciation
Uses |of |Net |Working |Capital |- |CORRECT |ANSWER✔✔-payment |of |dividends, |purchase |of |fixed |
assets, |purchase |of |investments, |repayment |of |long-term |loans, |retirement |of |stock
Liquidity |Ratios |- |CORRECT |ANSWER✔✔-measure |the |ability |to |meet |the |day-to-day |cash |
needs |of |the |firm
Solvency |Ratios |- |CORRECT |ANSWER✔✔-the |ability |to |repay |the |money |loaned |if |the |firm |
stopped |doing |business |today
Activity |Ratios |- |CORRECT |ANSWER✔✔-measure |the |level |of |activity |of |the |business |relative |to
|its |inventory |levels, |customer |credit |payments, |and |its |own |bill |paying
Profitability |Ratios |- |CORRECT |ANSWER✔✔-measure |the |ability |to |generate |profits
