The Accountant's Toolbox
The process of recording, classifying, summarizing, and interpreting financial transactions.
What is accounting?
The statement showing a company’s performance over time.
What is the Income Statement?
The #1 reason businesses fail financially.
What is Poor cash-flow management.
The person who manages a firm’s resources to meet its goals.
Who is the Financial Manager (CFO)?
Formula for Current Ratio
What is: Current Assets ÷ Current Liabilities.
The six-step procedure that produces financial statements.
What is the accounting cycle?
The statement that provides a snapshot at a specific moment in time.
What is the Balance Sheet?
The major problem with selling on credit.
What is: Cash is tied up in accounts receivable.
DAILY DOUBLE: A budget that ties together all others.
What is Operating (Master) Budget.
Ratio that excludes inventory for a stricter liquidity test.
What is: Acid-test (Quick) Ratio.
What is the difference between bookkeeping and accounting?
What is: Bookkeeping records transactions; accounting interprets and analyzes them.
DAILY DOUBLE: Which accounting statement summarizes cash coming in and going out of a firm?
What is the Statement of Cash Flows?
This 2001 collapse led to stricter auditing laws.
What is Enron?
Three types of budgets in a financial plan.
What are: Operating, Capital, Cash.
Ratio that measures how quickly inventory sells.
What is Inventory Turnover Ratio.
The internationally recognized professional designation for accountants in Canada.
What is CPA (Chartered Professional Accountant)?
The equation that must always balance.
What is: Assets = Liabilities + Owner’s Equity.
“Cooking the books” means lying about these.
What is Revenues or Expenses.
What type of Forecast: revenues, costs, and expenses for one year or less.
What is short-term forecast?
Ratio showing net income per share.
What is Earnings Per Share (EPS).
The five disciplines of accounting.
What are: Financial, Managerial, Auditing, Tax, Government/Non-profit.
The three main sections of a cash-flow statement.
What is Operating, Investing, and Financing activities.
What is one possible consequence of unethical reporting?
What is: Legal Action (or) Organizational Collapse
Comparing actual results with budgeted goals is called this.
What is financial control?
A company with lots of debt will score high on this type of ratio.
What is Leverage (Debt) Ratio.