GBS151 Chapter 14 WORKSHEET (18 pts) - Chapter 14 The Role...

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Chapter 14: The Role of Accountants and Accounting Information WORKSHEET (18 pts) Pages 356-31 1. What is the difference between accounting and bookkeeping? Accounting is a comprehensive system for collecting, analyzing, and communicating financial information; Bookkeeping is a recording of accounting transactions. 2. What are the two main fields of accounting? Financial and managerial 3. A firm’s financial accounting system is concerned with external information users, which include: Consumer groups, unions, stockholders, suppliers, creditors, and government agencies 4. The most basic tool of accounting is the accounting equation, which is: Record-keeping procedures 5. Another term for owners’ equity is: net worth 6. What are the two sources of capital in owners’ equity? The amount that the owners originally invested and Profits earned by and reinvested in the company 7. Debts that must be paid within one year are: current liabilities 8. In planning, controlling, and decision making what is the most important internal financial statement?
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Unformatted text preview: budgeT 9. The income statement is some±mes referred to as: ProFT-and-loss sTaTemenT 10. A unique combina±on of skills, technology, and knowledge that will be necessary for the future CPA is called: Core compeTencies for accountng 11. Name and describe the three ra±os that reveal trends that can be used to evaluate a ²rm’s ²nancial health, its progress, and its prospects for the future:-Solvency ra±os for estmatng shorT-Term and long-Term risk-Pro²tability ra±os for measuring poTental earnings-Ac±vity ra±os for evaluatng managemenT’s use of asseTs 12-14 If your company has revenues of $21,795 and cost of revenues of $8,621----What is your company’s gross pro²t? $21,795 -$8,621= $13,174 15-18 If your net income is $6,226.8 million and the number of common shares outstanding is $220.8 million, what is the earning per share of your stock? 6,226.8mil/220.8mil= $28.20 per share...
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