Business Test- Chapters 8 & 9

Stockholders typically want to view a firm's accounting information to
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Terms in this set (35)
In the context of statement of cash flows, cash flows from investing activitiesshow the amount of cash received from the sale of fixed assetsIn the context of an independent auditor's report, _____ indicates that the auditor believes the financial statements are seriously flawed and that they may be misleading and unreliablean adverse opinionIn the context of external audits of financial statements, which of the following statements is true of CPA firms?They must be independent of the companies they are auditingThe Securities and Exchange Commission requires publicly traded corporations to provide _____comparative financial statementsIn the context of interpreting financial statements, using comparative statements to identify changes in key account values over time is called _____horizontal analysis_____ are budgets that identify projected sales and production goals and the various costs the firm will incur to meet these goalsOperating budgetsIn the context of budget preparation, the cash budget is a financial budget document that identifiesshort-term fluctuations in cash flowThe _____ is a financial budget and shows how a firm's operations, investing, and financing activities are expected to affect all of the asset, liability, and owners' equity accountsbudgeted balance sheetThe opportunity cost that arises when a firm uses owner-supplied resources is known as a(n) _____implicit costIn the context of managerial accounting, _____ are costs that change directly with the level of productionvariable costs____ are costs that are the result of a firm's general operations and are not tied to any specific cost objectIndirect costsAccounting EquationAssets = Liabilities + Owner's EquityClaims that a firm's owners have against their company's assetsOwner's equityClaims that outsiders have against a firm's assetsLiabilitiesResources owned by a firmAssetsincreases in assets that result from activities intended to earn incomeRevenueResources that are used up as a result of business operationsExpensesCompares account values reported on the financial statements over two or more years to identify changes and trendsHorizontal analysisInvolves payment of money or other resourcesOut-of-pocket costArises when a firm uses owner-supplied resourcesimplicit costRemains the same when the level of production changes within some relevant rangeFixed costVaries directly with the level of productionVariable costIncurred directly as a result of some specific cost objectDirect costResult of a firm's general operations and is not directly tied to any specific cost objectIndirect costTechnique to assign product costs based on links between activities that drive costs and the production of specific productsActivity-based costing