Passed by Congress in 2002 in response to a series of corporate scandals, _________ requires principal executive and financial officers to certify a number of statements regarding the financials and places additional responsibilities on management to ensure that adequate internal controls are in place.
This principle states that the efforts of a given period (expenses) should be matched against the benefits (revenues) they generate.
The Matching Principle
100
These ratios are used by the financial community to assess company performance.
Market Value Ratios
100
Items held for resale to customers
Inventory
200
GAAP stands for ______.
Generally Accepted Accounting Principles
200
Name the four types of financial statements.
The Balance Sheet, The Income Statement, The Statement of Cash Flows, and The Statement of Stockholders' Equity
200
What are the four components of the accounting cycle?
Preparation of the daily journal entries, preparation of the adjusted journal entries, financial statements, and closing the journal entries.
200
These ratios are designed to measure a firm’s earnings power.
Profitability Ratios
200
Any asset that is intended to be converted into cash within one year or the company’s operating cycle, whichever is longer.?
Current Asset
300
A “clean” audit opinion indicates that the auditors do believe that the financial statements _____ the economic conditions of the firm
Present fairly
300
Cash, Short-term investments, Accounts receivable, Inventory, and Prepaid expenses are all types of ______
Current Assets
300
When transactions occur, we must decide when to recognize the transactions in the financial statements, and how to measure the transactions. What are the four principles of recognition and measurement?
These ratios measure a company’s ability to meet its current debts as they come due.
Solvency (Liquidity) Ratios
300
Explain the following acronyms: COGS, FIFO, and LIFO
Cost of Goods Sold, First In First Out, and Last In First Out
400
The Management Letter, The Financial Statements, The Footnotes and The Auditor's Report are all components of _____.
Financial Reports
400
Accounts payable, Wages payable, Interest payable, Short-term notes payable, Current maturities of long-term debt, Deferred revenues and other payables are all types of _____
Current Liabilities
400
Exceptions contradict the basic principles, in certain circumstances. What are the two exceptions?
Materiality; Conservatism
400
These ratios measure the speed with which assets move through operations or reflect the number of times during a given period that these specific assets are acquired, used, and replaced.
Asset Turnover Ratios
400
Name the four issues (stages) of inventory.
Acquiring Inventory, Carrying Inventory, Selling Inventory, and Ending Inventory
500
Answer both: The _____ governs financial reporting for publicly traded companies, while the _____ is responsible for the promulgation of generally accepted accounting principles (GAAP) for financial statements.
The Securities and Exchange Commission (SEC); Financial Accounting Standards Board (FASB)
500
Answer both: Sales and Fees earned are types of _____, while Cost of goods sold, Wages, Rent, Selling, Depreciation and Amortization are types of _____.
Operating revenues; Operating expenses
500
Basic assumptions are foundations of financial accounting measurements. What are the four basic assumptions?
Economic entity; Fiscal period; Going concern; Stable dollar
500
These ratios measure a company's ability to use borrowed funds (debt) to generate returns for stockholders.
Financial Leverage Ratios
500
The balance sheet account indicating the dollar amount due from customers from sales made (goods supplied or services rendered) on open account.