Management Entrepreneurship

Business

Quiz 8 :

Accounting Records and Financial Statements

Quiz 8 :

Accounting Records and Financial Statements

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Ratio analysis is the most common form of financial analysis.
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True False
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True

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The cash-flow statement is a critical financial statement,often more important to the survival of a business than profit as reported on the income statement.
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True False
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True

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On a weekly basis,business managers should record any money that is paid out.
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False

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In the accounting equation,Assets = Liabilities + Revenue.
True False
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Small business owners should always use separate checkbooks for their businesses and their personal lives.
True False
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The expertise with which the small business owner can understand,interpret,and use the information found in the financial statements will determine the soundness of the financial decisions made.
True False
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When preparing common-size statements,full or partial estimates are used since the business owner is making projections rather than recording actual transactions.
True False
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The majority of the mismanagement decisions that cause small businesses to fail are related to finance.
True False
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Using a single-entry accounting system will allow a small business owner to produce an income statement and a balance sheet.
True False
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"Cash flow = Receipts − Disbursements" is the basis of the cash-flow statement.
True False
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Industry average analysis compares firms to industry leaders.
True False
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When using the accrual basis method of accounting,transactions are recorded when cash is actually received and expenses are paid.
True False
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According to the chapter opening case,in 2008,Krispy Kreme had posted profits despite the fact that sales were down for the year.
True False
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Another name for assets is net worth.
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According to the text,the accounting process helps the small business owner translate numbers⎯the language of business⎯into plain English.
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The three most important financial statements for providing financial information about a business are the income statement,the balance sheet,and the statement of retained earnings.
True False
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Generally Accepted Accounting Principles are intended to create financial statement formats that are unique to each industry.
True False
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The accounting equation Assets = Liabilities + Equity is illustrated by the profit-and-loss financial statement.
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Assets are what your business owes,whereas liabilities are what your business owns.
True False
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When using a double-entry accounting system,debits always equal owner's equity.
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