#38. The acid-test ratio at December 31, 2002, rounded to the nearest tenth, is equal to: – Cash + Account Receivable in parenthesis divided by inventory
Cash From Operations – The normal day-to-day business activities of the business.
Discuss the siginifance of accounting systems in generating reliable accounting information and understand the five components of internal control. L02 – The answer to such a question of significance depends on how useful management considers the information to be and the cost of developing the information. The need for some accounting information may be prescribed by law e.g. income tax regulations, federal securities laws require publicly owned companies to prepare financial statements in conformity with generally accepted accounting priniciples. pp 7 The five compnentts of internal control, as discussed in Internal Control-Integrated Framework (Committee of Sponsoring Organizations of the Treadway Commission), are the control enviornment, risk assessment, control activites, information and communication, and monitoring. pp 8
Debts that not due and payable within a year are called – Fixed liabilities
income statement – A financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period. Also called the statement of operations.
Quick Ratio – Liquid Current Assets/Current Liabilities
Anything of value that is owned – Asset
The journal entry to record a payment on account will:
A) debit accounts payable and credit retained earnings
B) debit accounts payable and credit cash
C) debit cash and credit Expenses
D) debit Expenses and credit cash – B) debit Accounts Payable and credit Cash
Which of the following statements is true of big data?
Liability – An amount owed by a business is called a liability
What is the amount of principal due at maturity date? – Face value
sequential method – a method that allocates service costs
to user departments in a sequential manner. It gives partial consideration
to interactions among support departments.
Which оf the fоllоwing stаtements is true of big dаtа?
Debit memorandum – items the bank deducts from the account balance.
Assets = Liabilities (Payable)+Owner's Equity – Assets:something of value owned by the business
Liabilities: anything owed
Owner's Equity: Capital
An Audit – An audit does not prove that financial statements are 100% accurate. The audit opinion states the financial statements are not materially misstated in accordance with GAAP. It is not a statement regarding how good or bad the company will perform in the future. It lends credibility to the statements when an independent third party reviews the statements.
financial accounting – provides information for external decision makers

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