Ch. 17/18 Review

Financial management is a process used to manage the financial resources of a business.

• True

• False

The accounting cycle is a sequence of steps businesses follow to record, summarize, and report financial information.

• True

• False

 Recording the debit and credit parts of a transaction is called _________.

• generally accepted accounting principles 

• account analysis

• double-entry accounting

• financial planning

A _________ reports how cash moves into and out of a business.

• financial ratios

• cash flow statement

• balance sheet

• payroll register

What is the accounting equation?

• net income/sales=net profit ratio

• current assets - current liabilities = working capital

• total liabilities/total assets =debt ratio

• assets = liabilities + owner's equity

The process of setting financial goals and developing plans to reach them is known as __________.

• management

• accounting

• marketing

• financial planning

A short-term debt that must be paid within one year is called __________.

• current asset

• asset

• current liability

• long term liability

Amount of income earned before taxes and other deductions are withheld.

• gross pay

• sales forecast

• posting

• ledger

Reports the assets, liabilities, and owner's equity.

• current ratio

• gross pay

• payroll register

• balance sheet

Rules, standards, and practices businesses follow to record and report financial information.

• journalizing

• generally accepted accounting principles (GAAP)

• balance sheet

• budget