HRTM 421 Exam I (With correct solutions)

T/F: The cost principle states that only transactions that can be expressed in terms of money can be shown on a company's financial statements correct answers False The income statement is often referred to as a: correct answers Profit and loss statement On the balance sheet, equity is correct answers the amount of capital invested in the business plus retained earnings T/F: The statement of cash flow presents cash flow from operations, cash flow from investing activities, and cash flow from financing activities correct answers True T/F: The accounts receivable aging schedule summarizes revenues earned by each department within an operation and provides a comparison to budgeted amounts correct answers False The full disclosure principle: correct answers requires that all potential events that could impact a company's financial position or operating results be clearly reflected on the company's financial statements or footnotes attached to the financial statements The income statement presents: correct answers revenues, operating expenses, capital expenses, and profit or loss What order are assets listed on the balance sheet? correct answers how easily it can be converted into cash The daily payroll cost report: correct answers details payroll costs by position and assists management in monitoring payroll and overtime The CP3 system consists of: correct answers a monthly commitment budget, purchase order system, daily payroll system, and a daily profit and loss statement Working capital is the difference between: correct answers current assets & current liabilities T/F: When managing working capital, any surplus cash not required to operate your business should be used to fund projects that will generate additional cash flow correct answers True T/F: Offering a discount on cash sales saves the business money, because the company does not have to pay credit card company transaction fees correct answers True T/F: Cash provides a business liquidity and buying power correct answers True T/F: A cash forecast, in essence, is a cash budget correct answers True The longer it takes to collect accounts receivable: correct answers the more working capital the business will need