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BUSN 101 Tamu - Final Exam Review Correct Answers Latest Version
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BUSN 101 Tamu - Final Exam Review Correct Answers Latest Version
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BUSN 101 Tamu - Final Exam ReviewCorrect Answers Latest Version
Accounting Answer: The process of collecting, recording, classifying, summarizing, reporting, and
analyzing financial activities.
Financial Accounting Answer: Accounting that focuses on preparing external financial reports that
are used by outsiders such as lenders, suppliers, investors, and government agencies to assess the
financial strength of a business.
Managerial Accounting Answer: Accounting that provides financial information that mangers inside
the organization can use to evaluate and make decision about current and future operations.
Auditing Answer: The process of reviewing the records used to prepare financial statements and
issuing a formal auditor's opinion indicating whether the statements have been prepared in accordance
with accepted accounting rules
Balance Sheet Answer: A financial statement that summarizes a firm's financial position at a specific
point in time.
Assets Answer: Things of value owned by a firm.
Liabilities Answer: What a firm owes to its creditors; also called debts.
Owners' Equity Answer: The total amount of investment in the firm minus any liabilities; also called
net worth. Includes owners' investments (stock issued for a public company), net income, minus
dividends since the inception of the company.
, Accounting Equation Answer: Assets = Liabilities + Owners' Equity
Income Statement Answer: A financial statement that summarizes a firm's revenues and expenses
and shows its total profit or loss over a period of time.
Revenues Answer: The dollar amount of a firm's sales plus any other income it received from
sources such as interest, dividends, and rents.
Expenses Answer: The costs of generating revenues.
Cost of Goods Sold (COGS) Answer: The total expense of buying or producing a firm's goods or
services.
Gross Profit Answer: The amount a company earns after paying to produce or buy its products but
before deducting operating expenses.
Gross Profit = Revenue - COSG
Net Profit Answer: Subtract other expenses from gross profit.
Net Profit = Gross Profit - Business Expenses (Operating costs, etc.)
Finance Answer:
Financial Management Answer: The art and science of managing a firm's money so that it can meet
its goals.
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