Accounting KPIs

What are the steps in the accounting cycle?

The steps include journalizing transactions, posting to ledgers, preparing trial balances, adjusting entries, and preparing financial statements.

Business transactions can be classified into which three categories?

Operating, investing, and financing activities.

What does a chart of accounts do?

It is a list of all accounts used in the general ledger, organized by category to help classify and record financial transactions.

Fill in the blank: The accounting equation is __________.

Assets = Liabilities + Equity.

What is the purpose of a trial balance?

To verify that the debits equal the credits, ensuring the ledger is balanced.

What are special journals used for?

They are used for specific types of transactions and streamline the recording of similar transactions.

How do you account for petty cash?

Petty cash must be tracked accurately, and each disbursement needs to be recorded.

Explain cash control procedures.

Measures like verifying signatures, handling deposits properly, and reconciling accounts to ensure accuracy and security in cash transactions.

Accounts payable represents what?

The amounts a company owes to suppliers for goods or services received.

What are the methods used to value inventory?

FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and Average Cost.

What are the key components of payroll expenses?

Taxes and other deductions such as Social Security, Medicare, unemployment taxes, and workers' compensation.

Describe the nature of long-term assets.

Resources that provide benefits for more than one year, such as property, plant, equipment, and intangible assets.

Fill in the blank: A flexible budget adjusts for __________ levels of activity.

Different.

What is the primary purpose of financial reports?

To communicate a company's financial health to stakeholders.

What is the difference between variable costing and absorption costing?

Variable costing includes only variable costs in product costs, while absorption costing includes both variable and fixed costs.

What does cost-volume-profit (CVP) analysis help managers with?

Understanding how changes in costs, volume, and price affect a company's profit.

What information do financial statements summarize?

Financial data important for decision-making, including profitability, liquidity, and solvency.