Deck 15: Business Financial Records

Question 1

Total deposits less the total checks written can tell a business how well it is doing.

Answer 1

True

Question 2

Systems for keeping accounting records can require no equipment or be highly computerized.

Answer 2

True

Question 3

Accountants complete many of the day-to-day data entry and records management activities in large and small businesses.

Answer 3

False

Question 4

The use of budgets and a budgeting system guarantees the success of a business.

Question 5

Merchandise inventory is the value of goods purchased to sell to customers at a profit.

Question 6

A point-of-sale terminal can be used to calculate when merchandise should be reordered.

Question 7

Business expenses for advertising, supplies, and maintenance are examples of operating expenses.

Question 8

An income statement is a financial report that would primarily be used for internal control of cash.

Question 9

When a petty cash fund is used, it is NOT necessary to keep a written record of all money paid out of the fund.

Question 10

An accounts receivable record shows money owed and payments made by a business.

Question 11

Except for equipment, fixed assets tend to lose their value over time.

Question 12

Financial statements provide detailed information on such items as insurance and real property.

Question 13

A historical comparative analysis allows a business to compare performance against peer organizations.

Question 14

Many companies no longer issue actual paychecks to employees.

Question 15

Businesses that use budgets for their financial operations are usually more successful than those that do not use budgets.

Question 16

Cash comes into a business from two primary sources: cash receipts and checks.

Question 17

A company can be highly profitable yet not have enough cash on hand at the right times to pay its bills.

Question 18

By subtracting total projected costs and expenses from projected sales, a business can estimate its profit.

Question 19

The primary reason businesses keep financial records is to

A) comply with federal laws
B) keep track of debts owed
C) determine if they have made a profit or a loss
D) make monthly payments on time

Question 20

A manager is most likely to use financial reports to

A) decide whether to continue operations
B) decide on the terms of a business loan
C) detect fraudulent practices
D) make day-to-day decisions

Question 21

Movement of cash into and out of a business is known as

A) profit sharing
B) cost of goods sold
C) operating expenses
D) cash flow

Question 22

The money a business owes and the payments it makes for credit purchases are recorded in the

A) cash record
B) accounts payable record
C) depreciation record
D) accounts receivable record

Question 23

Someone who gives professional advice or offers professional services is called a(n)

A) auditor
B) investment banker
C) certified public accountant
D) consultant

Question 24

A business that is planning to introduce a new product will need a

A) capital budget
B) cash budget
C) sales budge
D) start-up budget

Question 25

The general term that is applied to a computer that becomes inadequate because a more efficient model comes on the market is

A) depreciation
B) replacement value
C) obsolescence
D) asset book value

Question 26

The original cost of an asset less its accumulated depreciation is the

A) balance value
B) book value
C) depreciated value
D) residual value

Question 27

An employer can determine the amount to withhold from an employee's paycheck for tax purposes by using a table from the IRS plus the employee's

A) attendance record
B) W-4 form
C) taxable income from last year
D) W-2 form

Question 28

Net worth, owner's equity, and stockholders' equity are all terms meaning

A) capital
B) liabilities
C) assets
D) inventory

Question 29

Which part of an income statement shows all the costs incurred in operating the business?

A) Total Liabilities
B) Profit or loss
C) Expenses
D) Revenue

Question 30

An operating budget includes projected

A) sales
B) profits
C) costs
D) all of the responses

Question 31

Which financial ratio shows whether a firm can meet its current debts comfortably?

A) return on sales
B) inventory turnover
C) current ratio
D) return on investment

Question 32

A graphic designed to provide a quick view of key financial performance indicators is called a(n)

A) bar chart
B) balance sheet
C) economic infographic
D) financial dashboard

Question 33

Which of the following is NOT an agency that assigns credit ratings to businesses?

A) Small Business Administration
B) Fitch Ratings
C) Moody's Investors Service
D) Standard & Poor's

Question 34

The basic accounting equation is

A) capital = assets + liabilities
B) assets = capital - liabilities
C) liabilities = assets + capital
D) assets = liabilities + capital

Question 35

The amount owed to a business by its customers is considered

A) accounts payable
B) an asset
C) capital
D) a liability

Question 36

The amount a retailer pays to a supplier for goods it then resells is called the

A) gross profit
B) net profit
C) current asset
D) cost of goods sold

Question 37

To determine whether or not a company is a good loan risk, lenders often review its

A) tax returns
B) financial ratios
C) capital budget
D) cash flow

Question 38

Match each item with the correct statement below.

-A forecast of sales revenue a company expects to receive for a specified period.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 39

Match each item with the correct statement below.

-Record showing what a customer owes and pays.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 40

Match each item with the correct statement below.

-A plan showing projected sales, costs, expenses, and profits for the ongoing operations of a business.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 41

Match each item with the correct statement below.

-An estimate of cash flowing in and out of a business.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 42

Match each item with the correct statement below.

-A financial plan used to determine when to replace or purchase fixed assets.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 43

Match each item with the correct statement below.

-Difference between current assets and current liabilities.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 44

Match each item with the correct statement below.

-Expensive assets that are expected to last and be used a long time.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 45

Match each item with the correct statement below.

-Claims against assets.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 46

Match each item with the correct statement below.

-Summaries of financial information and activities.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital

Question 47

Match each item with the correct statement below.

-Gradual loss of value because of wear and tear.

A)accounts receivable record
B)advertising budget
C)Budget
D)capital budget
E)cash budget
F)depreciation
G)financial records
H)fixed assets
I)income statement budget
J)liabilities
K)merchandising budget
L)operating budget
M)sales budget
N)working capital