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agec 340 Questions with Answers (100% Correct Answers)
managerial accounting Answer: collection and use of financial
information to make management position
financial accounting Answer: collection and use of financial
information to meet outside reporting requirements
Balance Sheet Answer: A financial document that is a snapshot in time
Income Statement Answer: a financial document that is a specific
period of time
Gross margin Answer: net sales-cost of goods sold =?
Net operating income Answer: gross margin-operating expenses=?
expenditure Answer: incurred when the business acquires an asset
expenses Answer: expenditures that are incurred during the
accounting period being reported
cash-basis approach Answer: revenue and expenses occur when cash
is received or period
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accural-basis approach Answer: revenues and expenses exist
whenever they are earned or incurred regardless of when cash
transaction occurs
profit Answer: amount remaining from a sale after cost of product,
expenses and interest have been paid
a record system should be: Answer: 1. Simple and easy to understand
2. Reliable, accurate, consistent, and timely
3. Based on the uniqueness of the particular business
4. Cost effective to implement and maintain
determines: success of business, financial condition, trends in
performaces, choosing alternatives for future Answer: what are good
finacial records used for?
profitability, efficiency, solvency, and liquidity Answer: areas of
analysis
Why do we use ratio analysis Answer: easy to: calculate, make
comparisons, understand and communicate firms financial position
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common size analysis Answer: Compares balance sheet and income
statement figures as percentages of some key base figure such as:
- Total sales
- Total assets
- Budgets
- Forecasts
profitability ratio Answer: return on assets and return on equity
Return on assets Answer: (Net income after taxes + interest expense) /
average total assets
Return on equity Answer: Net income after taxes/ avg owners equity
profitability Answer: what ratio is gross margin
profitability Answer: what ratio is operating margin
gross margin ratio Answer: measures how much profit a business
makes after the cost of goods and services compared to new sales
gross margin ratio Answer: (Net Sales - Cost of Goods Sold) / Net Sales
© 2025 All rights reserved
agec 340 Questions with Answers (100% Correct Answers)
managerial accounting Answer: collection and use of financial
information to make management position
financial accounting Answer: collection and use of financial
information to meet outside reporting requirements
Balance Sheet Answer: A financial document that is a snapshot in time
Income Statement Answer: a financial document that is a specific
period of time
Gross margin Answer: net sales-cost of goods sold =?
Net operating income Answer: gross margin-operating expenses=?
expenditure Answer: incurred when the business acquires an asset
expenses Answer: expenditures that are incurred during the
accounting period being reported
cash-basis approach Answer: revenue and expenses occur when cash
is received or period
© 2025 All rights reserved
,2
accural-basis approach Answer: revenues and expenses exist
whenever they are earned or incurred regardless of when cash
transaction occurs
profit Answer: amount remaining from a sale after cost of product,
expenses and interest have been paid
a record system should be: Answer: 1. Simple and easy to understand
2. Reliable, accurate, consistent, and timely
3. Based on the uniqueness of the particular business
4. Cost effective to implement and maintain
determines: success of business, financial condition, trends in
performaces, choosing alternatives for future Answer: what are good
finacial records used for?
profitability, efficiency, solvency, and liquidity Answer: areas of
analysis
Why do we use ratio analysis Answer: easy to: calculate, make
comparisons, understand and communicate firms financial position
© 2025 All rights reserved
, 3
common size analysis Answer: Compares balance sheet and income
statement figures as percentages of some key base figure such as:
- Total sales
- Total assets
- Budgets
- Forecasts
profitability ratio Answer: return on assets and return on equity
Return on assets Answer: (Net income after taxes + interest expense) /
average total assets
Return on equity Answer: Net income after taxes/ avg owners equity
profitability Answer: what ratio is gross margin
profitability Answer: what ratio is operating margin
gross margin ratio Answer: measures how much profit a business
makes after the cost of goods and services compared to new sales
gross margin ratio Answer: (Net Sales - Cost of Goods Sold) / Net Sales
© 2025 All rights reserved
