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5 Written Questions

5 Matching Questions

  1. current assets
  2. 2 ways of determining when expenses are recognized in the accrual system
  3. Cash methods of accounting
  4. Current ratio
  5. ROA (NI/total assets)
  1. a those that will be sold, consumed, or converted to cash within the current operating cycle of business (1 year)
  2. b current assets/current liablilities: it measures the ability to pay bankers/wholesalers back on time, ideal number between 2-4 and NCPA digest is 2.89, above 4 =too much invested in current assets, and lower than=pharmacy has probs paying current debts on time
  3. c revenues recongnized during period in which cash is received and expenses are recognized in the period during which cash is paid out- not commonly used by pharmacists
  4. d a)in the same accounting period as the associated revenue b)in period when associated good or service is used (b is for pharmacies)
  5. e Ratio measures how effectively all funds availableto the manager, both debt and equity, have been used. better indicator of manager's performance than ROE bc it considers all funds at teh manager's disposal, not just investements

5 Multiple Choice Questions

  1. profits (or losses) that the business has made during its years of operation and that have been left in the business (profits increase this/losses decrease)
  2. what a business owes, business debts whihc arise from purchasing goods or services on credit or from borrowing money to finance the businesses operations (current and noncurrent)
  3. a specialized language used to communicate financial statements
  4. wht you give back to owners
  5. can the firm pay its long-term debt on a continuing basis

5 True/False Questions

  1. Net income/net profitdifference between gross margin, and expenses for a specific period of time

          

  2. cost of goods sold (COGS)cost to the seller of all products sold. Total of invoice costs to the business less any discounts received

          

  3. supplies inventoryconsistes of goods that the pharmacy has purchased for resale (otc and rx drugs, cosmetics)

          

  4. current liabilitiesconsist of those debts that will come due during the current operating cycle of business (accounts payable, short term notes, accrued expenses, and current portion of long term debts)

          

  5. statement of retained earningsStatement of retained earnings which provides info on how the owner's investment in the business has changed over some period of time

          

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