Q&A Hero

Accounting

Q: Return on assets measures the effectiveness of an organization's ability to generate profit using its assets.
Q: The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.
Q: Reebok's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%.
Q: ________________________________ reports changes in the owner's claim on the business's assets over a period of time.
Q: Return on assets is useful to decision makers for evaluating management, analyzing and forecasting profits, and in planning activities.
Q: Risk is the _________________ about the return an investor expects to earn.
Q: Return on assets is also known as return on investment.
Q: Return on assets = ______________ divided by average total assets.
Q: Return on assets is often stated in ratio form as the amount of average total assets divided by income.
Q: _________________ is net income divided by average total assets.
Q: Net assets always increase when revenue is recorded.
Q: ______________________ is the recording of financial transactions and events, either manually or electronically.
Q: An owner's investment in a business always creates an asset (cash), a liability (note payable), and owner's equity (investment.)
Q: A __________________ occurs when expenses exceed revenues.
Q: Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.
Q: For a proprietorship, owner investment and revenues increase __________________ and owner withdrawals and expenses decrease it.
Q: From an accounting perspective, an event is a happening that affects an entity's accounting equation, but cannot be measured.
Q: Using the accounting equation, equity is equal to ________________________.
Q: An external transaction is an exchange of value within an organization.
Q: The term __________________ refers to a liability that promises a future outflow of resources.
Q: Every business transaction leaves the accounting equation in balance.
Q: During the accounting period, the assets of a business increased $64,000 and liabilities decreased $17,000; consequently, equity in the business must have __________________ (increased, decreased) $__________________________.
Q: Net income is the excess of expenses over revenues, whereas net loss is the excess of revenues over expenses.
Q: The accounting equation is ______________________________.
Q: The legitimate claims of a business's creditors take precedence over the claims of the business owner.
Q: The owner's claim on assets is called __________________.
Q: Owner's investments are gross increases in equity from a company's earnings activities.
Q: Creditors claims on assets that reflect obligations to transfer assets are called _____________.
Q: A company might provide a service or product on credit. "On credit" implies that the cash payment will occur on a later date.
Q: _____________ is increased by owner's investments and revenues. It is decreased by withdrawals and expenses.
Q: Revenues occur when expenses exceed assets.
Q: A common characteristic of __________ is their ability to provide expected future benefits to a business.
Q: The balance sheet is also called the statement of financial position because it describes the financial position of the business at a point in time.
Q: ____________ are the gross increases in equity from a company's earnings activities
Q: The accounting equation implies that: Assets + Liabilities = Equity.
Q: The ______________ reports revenues earned and expenses incurred by a business over a period of time.
Q: The accounting equation can be restated as: Assets - Equity = Liabilities.
Q: Assets removed from the business by the business owner for personal use are called ____________.
Q: Withdrawals are expenses.
Q: The accounting equation is: Assets = ___________ + Equity.
Q: Assets are the resources owned or controlled by a business.
Q: A ___________ occurs when expenses are greater than revenues.
Q: Liabilities are the owner's claim on assets.
Q: ______________ activities involve using resources to research, develop, purchase, produce, distribute, and market products and services.
Q: Expenses decrease equity and are the costs of assets or services used to earn revenues.
Q: ________________ activities involve the acquisition and disposal of resources that an organization uses to acquire and sell its products or services.
Q: Net income occurs when revenues exceed expenses.
Q: ________________ activities are the means organizations use to pay for resources such as land, building, and equipment.
Q: A net loss occurs when revenues exceed expenses.
Q: An audit is _______________ of an organization's accounting systems and records.
Q: Revenues are increases in equity from a company's earning activities.
Q: __________ is the defining of the ideas, goals and actions of an organization.
Q: Owner financing refers to resources contributed by creditors or lenders.
Q: There are at least three types of partnerships that limit the partners' liability. They are 1)_______________________, 2) ___________________, and 3)______________________.
Q: Investing activities are the acquiring and selling of resources that an organization uses to acquire and sell its products or services.
Q: A disadvantage of a sole proprietorship is the fact that the owner has ___________________.
Q: The three major activities of a business are recording, financing, and investing.
Q: In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called ______________________________.
Q: Planning activities are the means an organization uses to pay for resources like land, buildings, and equipment to carry out its plans.
Q: A primary purpose of ________________ is to make information in financial statements relevant, reliable and comparable.
Q: Strategic management is the process of determining the right mix of operating activities for the type of organization, its plans, and its markets.
Q: The ________________ principle states that transactions and events are expressed in money units.
Q: Planning is defining an organization's ideas, goals, and actions.
Q: The ______________ principle assumes business will continue operating indefinitely instead of being closed or sold.
Q: The three major types of business activities are operating, financing, and investing.
Q: The _______________ principle requires that financial information is supported by independent, unbiased evidence.
Q: The three common forms of business ownership include sole proprietorship, partnership, and non-profit.
Q: The principle that requires that a business be accounted for separately from its owners is the __________________ principle.
Q: The Securities and Exchange Commission (SEC) is the private group that sets both broad and specific accounting standards.
Q: _________ are beliefs that separate right from wrong.
Q: The Securities and Exchange Commission (SEC) is the government group that establishes reporting requirements for companies that issue stock to the public.
Q: Congress passed the ______________________ to help curb financial abuses at companies that issue their stock to the public.
Q: A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.
Q: Shareholders are owners of a corporation and typically elect ______________________ to oversee their interests in the corporation.
Q: The International Accounting Standards Board (IASB) is the government group that establishes reporting requirements for companies that issue stock to the public.
Q: ______________ is the area of accounting aimed at serving external users.
Q: The monetary unit assumption means that all international transactions must be expressed in dollars.
Q: ______________ users of accounting information are not directly involved in running the organization.
Q: According to the cost principle, it is preferable for managers to report an estimate of an asset's value.
Q: A ____________________ is a business that is owned by only one person.
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