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8 Cards in this Set

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  • Back
List four groups that use accounting information, and briefly explain why each group has an interest in this information.
1. Managers
2. Lenders and Suppliers
3. Stockholders and potential investors
4. Government agencies
What is the difference between a private accountant and a public accountant? What are certified public accountants?
Private accountant is employed by a private organization
Public accountant a CPA is an accountant whose services may be hired on a fee basis by individuals and firms.
State the accounting equation, and list two specific examples of each term in the equation.
Assets = liabilities + owner’s equity
Assets liabilities owner’s equity
Cash Accountants Payable Retained earnings
Marketable securities Notes Payable Value of common stock
Accountants receivable Salary payable
Notes receivable Taxes payable
Prepaid expenses Mortgage payable
Briefly describe the five steps of the accounting cycle in order.
1. Analyzing source documents (receipts)
2. Record transactions (bookkeeping)
3. Post transactions to accounts
4. Prepare a trial balance
5. Prepare financial statements and close the books
How are current assets distinguished from fixed assets? Why are fixed assets depreciated on a balance sheet?
Current assets are assets that can quickly be converted into cash or that will be used in one year or less.

Fixed assets are assets that will be held or used more than a year.

Current Fixed
Cash Land
Marketable securities Building
Accountants receivable Machinery or equipment
Notes receivable
Merchandise inventory
Prepaid expenses
1. Ten seconds is not very long. And yet Bang Networks has been successful because it can provide data in real time and eliminate this type of time lag. Why do you think a time lag of even ten seconds for a market prices for stocks and bonds is so important to brokerage firms and securities traders?
Market prices are constantly functioning so best to know even a brief delay in getting current prices wouldn’t be good. Brokerage firm would face more risk because unable to follow market trends.
Missed opportunities, Info change, Price can go up in 15 seconds.
2. Other than financial institutions, what types of businesses are likely to need Bang Networks’ technology? Explain your answer.
Transportation, Online auction, Luxury travel, Movie theaters online tickets
Gambling, Airlines, EMT, Air defense
3. Sometimes executives with no technical expertise must approve contracts for services such as those offered by Bang Networks. If your were a sales representative for Bang Networks, how would you explain to a bank’s CEO the basic value and importance of your firm’s services?
Save money by doing business in real time. Do not stress technical services (object routers) Emphasize the cost effectiveness of eliminating leased lines. Business benefits of receiving market data as soon as possible.