College Bus- Semester 1 Final (Ch. 17-20, App. D) Part 1

Which of the following statements accurately describes the relationship between bookkeeping and accounting?

• Bookkeeping and accounting are two names for the same process

• Bookkeeping is the process of recording financial transactions, while accounting involves analyzing and interpreting this data

• Accounting is a preliminary step before bookkeeping

• Bookkeeping is only necessary for large corporations, whereas accounting is used by all types of businesses

Which financial statement reports the profit or loss of a company over a specified period of time?

• Income Statement

• Balance Sheet

• Current Ratio

• Statement of Cash Flows

Which financial statement represents what the company owns and owes as of a specific date?

• Income Statement

• Balance Sheet

• Statement of Cash Flows

• Trial Balance

What types of accounts are shown on a balance sheet?

• Revenue & Expense

• Assets, Liabilities & Owners Equity

• Capital, Cost and Valuation

• Operating Expenses & Cash Flows

On a balance sheet, where would you find the amounts owed to creditors?

• Assets

• Liabilities

• Equity

• Income

Which type of financial ratios would you analyze to assess your company's ability to meet short-term obligations?

• Leverage Ratios

• Liquidity Ratios

• Activity Ratios

• Profitability Ratios

In accounting, the fundamental equation is represented as Assets = ???

• Liabilities - Equity

• Liabilities + Equity

• Income - Expenses

• Income + Expenses

Which of the following refers to items that can be converted to cash within one year?

• Fixed Assets

• Long-Term Assets

• Current Assets

• Current Liabilities

The buildings and land owned by a business would be classified as __________, and loans

taken by it would be classified as ________

• Current Assets, Current Liabilities

• Long-Term Assets, Long-Term Liabilities

• Long-Term Assets, Current Liabilities

• Current Assets, Long-Term Liabilities

A corporation has current assets of $120 Million and current liabilities of $80 Million. Total assets

are $480 Million, and total liabilities are $240 Million. Its Current ratio is __________ and its Debt

to Equity ratio is _________

• 2, 2

• 1.5, 1

• 1, 2

• 2, 0.5