Answer the following questions:
Identify the three types of services performed by CPAs.
How does the double-entry system reduce the chances of mistakes or fraud in accounting?
What are the three basic financial statements, and what major information does each contain?
Identify the three major classifications of financial statement ratios, and give an example of one ratio in each category.
Explain how financial ratios allow managers to monitor efficiency and effectiveness.
Explain the ways in which financial accounting differs from managerial (management) accounting.
If you were planning to invest in a company, which of the three types of financial statements would you most want to see? Why?
Dasar Co. reports the following data in its September 30, 2004, financial statements:
Gross sales: $225,000
Current assets: 40,000
Long-term assets: 100,000
Current liabilities: 16,000
Long-term liabilities: 44,000
Owners’ equity: 80,000
Net income: 7,200
Using Dasar’s financial statements, compute the following ratios:
Return on owner’s equity
Why do currency values change daily?
How do exchange rates affect business transactions?
What are the problems associated with variations in financial reporting from country to country?