Chapter 17

Accrued Expenses refer to:

• represents payments the company has already made for services not yet received.

• bills that must be paid within 1 year of the date of the balance sheet.

• costs incurred by the company for which no payment had been made.

• refers to money owed to the company for goods or services provided and billed to a customer.

Goodwill represents:

• represents payments the company has already made for services not yet received.

• represents the original amount the owners paid into the company plus any additional paid-in capital to purchase the capital stock.

• represents the price paid for an asset in excess of its book value.

• represents the money that has been invested in the business plus cumulative net profits and losses the company has generated.

What does ratio analysis allow you to do?

• Compare performance over time and to others in the same industry.

• Measure the amount of net income as a percentage of sales.

• Assess whether the company has enough current assets to pay its short-term liabilities.

• Determine the portion of long-term debt that must be paid within a year.

What is the quick ratio?

• It is a financial ratio that measures liquidity.

• Amount of net income as a percentage of sales.

• The process of recording, sorting, retrieving, and reporting financial statements.

• Portion of long-term debt that must be paid within a year.

What does accounts payable refer to?

• Money owed by a business to its suppliers.

• The portion of long-term debt that must be paid within a year.

• Costs incurred by the company for which no payment had been made.

• Money owed to the company for goods or services provided and billed to a customer.

What are intangible assets?

• The value of patents, software programs, copyright, trademarks, franchises, brand names, or assets that cannot be physically touched.

• The process of recording financial transactions and developing financial statements.

• Cash and other assets such as inventory and accounts receivable.

• The money invested in the business plus cumulative net profits and losses.

What is financial accounting?

• The process of recording financial transactions and developing financial statements used for financial analysis and external reporting.

• A branch of accounting that involves evaluating an investment opportunity.

• The value of patents, software programs, copyright, trademarks, franchises, brand names, or assets that cannot be physically touched.

• Cash and other assets such as inventory and accounts receivable.

What do current assets include?

• Cash and other assets such as inventory, accounts receivable, and prepaid expenses that can be converted into cash within a year.

• The value of patents, software programs, copyright, trademarks, franchises, brand names, or assets that cannot be physically touched.

• Economic obligations of the company, such as money it owes to lenders, suppliers, and employees.

• The process of recording the financial transactions and developing financial statements used for financial analysis and external reporting.

What are current liabilities?

• Bills that must be paid within 1 year of the date of the balance sheet.

• The value of patents, software programs, copyright, trademarks, franchises, brand names, or assets that cannot be physically touched.

• Cash and other assets such as inventory, accounts receivable, and prepaid expenses that can be converted into cash within a year.

• The process of recording the financial transactions and developing financial statements used for financial analysis and external reporting.

What does account receivable refer to?

• Money owed to the company for goods or services provided and billed to a customer.

• Money owed by a business to its suppliers.

• Represents payments the company has already made for services not yet received.

• Assesses whether the company has enough current assets to pay its short-term liabilities.