ACCT 2102 Farmer Test 1 Questions and Answers | Latest Update | 2024/2025 | 100% Verified
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Course
ACCT 2102 Farmer
Institution
ACCT 2102 Farmer
ACCT 2102 Farmer Test 1 Questions and
Answers | Latest Update | 2024/2025 |
100% Verified
What is the function of a ledger in accounting?
A ledger is a book or digital record that contains all the accounts for a company, tracking all
financial transactions in detail.
Explain the term "...
ACCT 2102 Farmer Test 1 Questions and
Answers | Latest Update | 2024/2025 |
100% Verified
What is the function of a ledger in accounting?
✔✔ A ledger is a book or digital record that contains all the accounts for a company, tracking all
financial transactions in detail.
Explain the term "journal entry" in accounting.
✔✔ A journal entry is a record of a transaction that includes the date, accounts affected, amounts
debited and credited, and a brief description.
What is meant by "variable costs"?
✔✔ Variable costs are expenses that change directly with the level of production or sales
volume, such as materials and labor.
Define "working capital ratio."
✔✔ The working capital ratio is a financial metric that compares current assets to current
liabilities, assessing a company’s short-term liquidity.
1
, What does "financial statement analysis" involve?
✔✔ Financial statement analysis involves evaluating a company's financial statements to
understand its performance, trends, and financial health.
What is a "material weakness" in internal controls?
✔✔ A material weakness is a deficiency in internal controls that creates a reasonable possibility
that a material misstatement in financial statements will not be prevented or detected.
Explain "overhead costs."
✔✔ Overhead costs are ongoing expenses associated with operating a business that cannot be
directly attributed to a specific product or service, such as rent and utilities.
What is the purpose of an end-of-period adjustment?
✔✔ An end-of-period adjustment ensures that all revenues and expenses are accurately recorded
in the correct accounting period for financial reporting.
Define "bank statement."
✔✔ A bank statement is a summary of all transactions that have occurred in a bank account over
a specific period, detailing deposits, withdrawals, and ending balances.
2
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