NASCLA Contractors Guide Chapter 14 (Financial Management) fully solved 2023 passed

NASCLA Contractors Guide Chapter 14 (Financial Management)Accounting Cycle - correct answer The series of accounting activities included in recording financial information for a fiscal period Classify and Record Transactions - correct answer Typical Journals that Companies include: Cash Receipts and Sales Journal: This Journal is used when cash comes in or a sale is charged to a customer. Prepare Financial Statements - correct answer Balance Sheet, Income Statement, Statement of cash flows Balance Sheet - correct answer gives the owner good insight into the growth and stability of the company at a particular point in time. Property and Equipment - correct answer Sometimes referred to as capital or fixed assets. Assets needed to carry on the business of a company and are not normally consumed in the operation of the business. Land, buildings, equipment and furniture would all be considered fixed assets. Liabilities - correct answer are all debt and obligations owned by the business. Liabilities that will mature and must be paid within one year are called current liabilities. Working Capital - correct answer can also be determined by looking at the balance sheet. Current Assets - Current Liabilities = Working Capital Income Statement - correct answer the income statement, sometimes called the profit and loss statement, is a summary of the company's revenues and expenses over a given period of time. Income - Cost of Goods Sold = Gross Profit Gross Profits - Expenses = Net Income Revenues - correct answer are the income received from the daily operations of business. Expenses - correct answer are the monies paid out or owed for goods or services over a given period of time. Direct Costs - correct answer costs directly linked with a particular project. operating expenses - correct answer general items that contribute to the cost of operating a business. Tax Provision Expenses - correct answer The tax liabilities your company has for federal, state and local taxes. Net Profit - correct answer difference between revenues and expenses. Net profit directly contributes to the net worth of the company. Statement of Cash Flows - correct answer summarizes your current cash position, your cash sources, and use of the funds over a given period of time. Quick Ratio - correct answer calculated by dividing the current liabilities into the current assets minus inventory. Activity Ratios - correct answer measures of how effectively the company uses its assets Methods of Accounting - correct answer An accounting method is a set of rules used to determine when and how income and expenses are reported. There are 2 basic methods of accounting used to keep track of the company's income and expenses. 1. cash method 2. accrual method.