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Finance Quiz 2
Terms in this set (10)
Current assets are more ____________ than long term assets
examples of long term assets
plant and equipment
(accounts payable) Who does the company owe money to?
amounts a company owes because it purchased goods or services on credit from a supplier or vendor
balance sheet tells you....
-a snapshot in time of all assets accumulated with all the liabilities they've incurred
-a reflection of everything a company owns and owes
Income statement tells you....
periodic report that tells us if we were profitable and had net income or not (net loss)
If you purchase a fixed asset today at a 1 million dollar price point, and has a life of 10 years- how much would the asset depreciate each year
100,000- 1 year
after 5 years 500,000
what gets deducted before operating income
what gets deducted after operating income
income taxes (interest)
high inventory turnover means
implies either strong sales and/or large discounts, ineffective buying (the company buys too often in small quantities, therefore the buying price is higher).
-can indicate better liquidity, but it can also indicate a shortage or inadequate inventory levels, which may lead to a loss in business
low inventory turnover means
-implies weak sales and, therefore, excess inventory
-can indicate poor liquidity, possible overstocking, and obsolescence, but it may also reflect a planned inventory buildup in the case of material shortages or in anticipation of rapidly rising prices.
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