SPMA 2P27 MID-TERM EXAM QUESTIONS &
ANSWERS
Define Accounting with the 4 type of sheets we are looking at during this class? -
Answer -Financial accounting is the recording and communication of economic
information in accordance with Generally Accepted Accounting Principles (GAAP).
1. Income Sheet
2. Balance Sheet
3. Cash Flow Statement
4. Profit & Loss Statement
Define Financial Planning - Answer -Examining future income and expenses to help
steer a company in a given direction
What are the 5 forces in a Porter's analysis? - Answer -1. Threat of new entrants
2. Bargaining power of buyers
3. Threat of substitute products or services
4. Bargaining power of suppliers
5. Rivalry among existing competitors
What is the formula for Profit? - Answer -Profit = Revenue - Expenses
What is the TBL Theory (Triple Bottom Line)? - Answer -Profit, People, Plant
What happened to PlayersParadise? - Answer -They rooted on borrowed land and it
got sold to a weed company for greenhouse space.
Define Finance - Answer -The "science of the management of money and other
assets."
Define Financial Management - Answer -"Conducting all financial matters of the
organization in way that ensures that funds are used in a proper and efficient manner."
-Proper - "of the required type; suitable or appropriate"
- Efficient - "acieving maximum productivity with minimum wasted effort or expense"
What is Financial Efficiency? - Answer -Getting more output from the same resources
or getting the same output from fewer resources.
What use financial reporting and accounting and who is it for? - Answer -Used to
provide the most useful financial information for decision-making (strategy) and it's for
Executive staff, Board of directors, managers, and more.
, Is managerial effectiveness is revealed in the ability to make sound decisions? -
Answer -Yes.
What are some Key Concepts of Financial Accounting? - Answer -- "Outside"
Accounting
- Statement of "facts" (historical)
- For tax filing/lender reporting
- Set periods - quarterly, bi-annual, annually
What are some Key Concepts of Managerial Accounting? - Answer -- "Internal"
Accounting
- Looking at ongoing reporting
- Flexible
- Used to assist management in decision-making
- Information helps "run" company - i.e., performance reporting, cost projections,
process management
What does Financial Accounting refer to? - Answer -The aggregation of accounting
information into financial statements
What does Managerial Accounting refer to? - Answer -The internal processes used to
account for business transactions
Define Asset - Answer -Something valuable that an entity owns, benefits from, or has
use of, in generating income and has money value
Define Liabilities - Answer -Finance: A claim against the assets, or legal obligations of a
person or organization, arising out of past or current transactions or actions
Accounting: accounts and wages payable, accrued rent and taxes, trade debt, and short
and long-term loans
What is the Accounting Equation? - Answer -Assets = Liabilities + Shareholders' Equity
What is a Capital Asset? - Answer -Significant pieces of property
What is a Business Capital Asset - Answer -Tangible asset with a useful life, typically
longer than a year, not intended for sale in the regular course of the business's
operation
What is an Intangible Asset? - Answer -Not physical in nature
Define Revenue - Answer -The income generated from the sale of goods or services,
or any other use capital or assets
ANSWERS
Define Accounting with the 4 type of sheets we are looking at during this class? -
Answer -Financial accounting is the recording and communication of economic
information in accordance with Generally Accepted Accounting Principles (GAAP).
1. Income Sheet
2. Balance Sheet
3. Cash Flow Statement
4. Profit & Loss Statement
Define Financial Planning - Answer -Examining future income and expenses to help
steer a company in a given direction
What are the 5 forces in a Porter's analysis? - Answer -1. Threat of new entrants
2. Bargaining power of buyers
3. Threat of substitute products or services
4. Bargaining power of suppliers
5. Rivalry among existing competitors
What is the formula for Profit? - Answer -Profit = Revenue - Expenses
What is the TBL Theory (Triple Bottom Line)? - Answer -Profit, People, Plant
What happened to PlayersParadise? - Answer -They rooted on borrowed land and it
got sold to a weed company for greenhouse space.
Define Finance - Answer -The "science of the management of money and other
assets."
Define Financial Management - Answer -"Conducting all financial matters of the
organization in way that ensures that funds are used in a proper and efficient manner."
-Proper - "of the required type; suitable or appropriate"
- Efficient - "acieving maximum productivity with minimum wasted effort or expense"
What is Financial Efficiency? - Answer -Getting more output from the same resources
or getting the same output from fewer resources.
What use financial reporting and accounting and who is it for? - Answer -Used to
provide the most useful financial information for decision-making (strategy) and it's for
Executive staff, Board of directors, managers, and more.
, Is managerial effectiveness is revealed in the ability to make sound decisions? -
Answer -Yes.
What are some Key Concepts of Financial Accounting? - Answer -- "Outside"
Accounting
- Statement of "facts" (historical)
- For tax filing/lender reporting
- Set periods - quarterly, bi-annual, annually
What are some Key Concepts of Managerial Accounting? - Answer -- "Internal"
Accounting
- Looking at ongoing reporting
- Flexible
- Used to assist management in decision-making
- Information helps "run" company - i.e., performance reporting, cost projections,
process management
What does Financial Accounting refer to? - Answer -The aggregation of accounting
information into financial statements
What does Managerial Accounting refer to? - Answer -The internal processes used to
account for business transactions
Define Asset - Answer -Something valuable that an entity owns, benefits from, or has
use of, in generating income and has money value
Define Liabilities - Answer -Finance: A claim against the assets, or legal obligations of a
person or organization, arising out of past or current transactions or actions
Accounting: accounts and wages payable, accrued rent and taxes, trade debt, and short
and long-term loans
What is the Accounting Equation? - Answer -Assets = Liabilities + Shareholders' Equity
What is a Capital Asset? - Answer -Significant pieces of property
What is a Business Capital Asset - Answer -Tangible asset with a useful life, typically
longer than a year, not intended for sale in the regular course of the business's
operation
What is an Intangible Asset? - Answer -Not physical in nature
Define Revenue - Answer -The income generated from the sale of goods or services,
or any other use capital or assets
