Question 1

What distinguishes the two most commonly used categories of owners' equity?

Accepted Answer

A)  The amount of equity within each type of asset-current versus fixed and intangible 
B)  The financial form of the equity-cash investments versus stock and bond investments 
C)  The source of the equity-investments versus earnings 
D)  The use of the equity-invested versus saved 
E)  The age of the equity-older investments and earnings versus newer investments and earnings 
A)  The amount of equity within each type of asset-current versus fixed and intangible 
B)  The financial form of the equity-cash investments versus stock and bond investments 
C)  The source of the equity-investments versus earnings 
D)  The use of the equity-invested versus saved 
E)  The age of the equity-older investments and earnings versus newer investments and earnings C

Question 2

Who is responsible for developing and gaining support for global accounting standards and gaining support and cooperation to implement those standards?

Accepted Answer

A)  Securities and Exchange Commission 
B)  Sarbanes-Oxley 
C)  International Accounting Standards Board 
D)  Financial Accounting Standards Board 
E)  Institute of Management Accountants 
A)  Securities and Exchange Commission 
B)  Sarbanes-Oxley 
C)  International Accounting Standards Board 
D)  Financial Accounting Standards Board 
E)  Institute of Management Accountants C

Question 3

Which of the following ratios measures a firm's potential earnings?

Accepted Answer

A)  Short-term solvency ratio 
B)  Long-term solvency ratio 
C)  Profitability ratio 
D)  Activity ratio 
E)  Equity ratio 
A)  Short-term solvency ratio 
B)  Long-term solvency ratio 
C)  Profitability ratio 
D)  Activity ratio 
E)  Equity ratio C

Question 4

Which of the following refers to the financial statement detailing a firm's assets, liabilities, and owners' equity?

Accepted Answer

A)  Income statement 
B)  Statement of cash flows 
C)  Balance sheet 
D)  Expense report 
E)  Annual budget 
A)  Income statement 
B)  Statement of cash flows 
C)  Balance sheet 
D)  Expense report 
E)  Annual budget

Question 5

Which of the following indicates a firm will be able to pay its bills in a satisfactory manner?

Accepted Answer

A)  A debt to equity ratio of 1:1 or higher 
B)  An activity ratio of 5:1 or less 
C)  A net income to common shares outstanding ratio of 1:1 or less 
D)  A current ratio of 2:1 or higher 
E)  A profitability ratio of 5:1 or higher 
A)  A debt to equity ratio of 1:1 or higher 
B)  An activity ratio of 5:1 or less 
C)  A net income to common shares outstanding ratio of 1:1 or less 
D)  A current ratio of 2:1 or higher 
E)  A profitability ratio of 5:1 or higher

Question 6

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following BEST demonstrates cash flow from operations?

Accepted Answer

A)  Transactions involved in buying and selling goods and services 
B)  Net cash used in or provided by investment 
C)  Cash flow from borrowing or issuing stock 
D)  Outflows for payments of dividends 
E)  Inflows of cash that will be used to repay borrowed money 
A)  Transactions involved in buying and selling goods and services 
B)  Net cash used in or provided by investment 
C)  Cash flow from borrowing or issuing stock 
D)  Outflows for payments of dividends 
E)  Inflows of cash that will be used to repay borrowed money

Question 8

What do businesses use to identify, record, and retain financial information, and includes the people, reports, procedures and other resources needed to compile transactions?

Accepted Answer

A)  Accounting information systems 
B)  Financial accounting 
C)  Bookkeeping 
D)  Accounting 
E)  Managerial accounting 
A)  Accounting information systems 
B)  Financial accounting 
C)  Bookkeeping 
D)  Accounting 
E)  Managerial accounting

Question 9

Why are efforts to standardize global accounting practices important?

Accepted Answer

Although more than 138 countries have ad

Question 10

Why is it important to have ethical codes in the field of accounting?

Accepted Answer

The purpose of ethics in accounting is t

Question 11

How do certified public accountants ensure a company's financial reports really represent its operations?

Accepted Answer

A)  By reviewing GAAP standards 
B)  By conducting an audit 
C)  Through the filing of tax information 
D)  By acting as consultants to noncertified accountants 
E)  By acting as advisory to senior management 
A)  By reviewing GAAP standards 
B)  By conducting an audit 
C)  Through the filing of tax information 
D)  By acting as consultants to noncertified accountants 
E)  By acting as advisory to senior management

Question 12

Which of the following ratios measures a firm's ability to meet its current debt obligations?

Accepted Answer

A)  Short-term solvency ratio 
B)  Long-term solvency ratio 
C)  Profitability ratio 
D)  Activity ratio 
E)  Equity ratio 
A)  Short-term solvency ratio 
B)  Long-term solvency ratio 
C)  Profitability ratio 
D)  Activity ratio 
E)  Equity ratio

Question 13

The percentage of liabilities in a company's assets plus the percentage of owners' equity in its assets is always equal to 100.

Accepted Answer

A) True 
 B)False

Question 14

It is currently very common that a CPA who is hired to audit a firm's finances will also be hired to help design a more efficient financial information system.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements BEST describes the need for global accounting standards?

Accepted Answer

A)  The complexity of the global market increases the risk of unethical accounting behavior by allowing accountants to choose which national GAAP standards are best for their clients. 
B)  The rise of the global market increases the risk of money laundering and offshore accounting. 
C)  The rise of the global market increases the risk of fraudulent business transactions across borders. 
D)  The rise of the global market increases the risk of international dumping and profit-skimming. 
E)  The rise of the global market increases the risk of the creation of dummy companies and accounts for the purpose of dumping toxic assets. 
A)  The complexity of the global market increases the risk of unethical accounting behavior by allowing accountants to choose which national GAAP standards are best for their clients. 
B)  The rise of the global market increases the risk of money laundering and offshore accounting. 
C)  The rise of the global market increases the risk of fraudulent business transactions across borders. 
D)  The rise of the global market increases the risk of international dumping and profit-skimming. 
E)  The rise of the global market increases the risk of the creation of dummy companies and accounts for the purpose of dumping toxic assets.

Question 16

Which of the following areas of the Certified Fraud Examiner (CFE)exam includes theories of fraud prevention?

Accepted Answer

A)  Criminology and ethics 
B)  Financial transactions 
C)  Fraud investigation 
D)  Fraud litigation 
E)  Legal elements of fraud 
A)  Criminology and ethics 
B)  Financial transactions 
C)  Fraud investigation 
D)  Fraud litigation 
E)  Legal elements of fraud

Question 17

Who is responsible for ensuring the accounting information system provides the reports and statements needed for management planning and decision making?

Accepted Answer

A)  Auditors 
B)  Controller 
C)  Fraud examiners 
D)  Managerial accountant 
E)  Bookkeepers 
A)  Auditors 
B)  Controller 
C)  Fraud examiners 
D)  Managerial accountant 
E)  Bookkeepers

Question 18

Which of the following requires auditor rotation by prohibiting the same person from being the lead auditor for more than five consecutive years?

Accepted Answer

A)  The Association of Certified Fraud Examiners 
B)  The Securities and Exchange Commission 
C)  The American Institute of Certified Public Accountants 
D)  The Financial Accounting Standards Board 
E)  Sarbanes-Oxley Act of 2002 
A)  The Association of Certified Fraud Examiners 
B)  The Securities and Exchange Commission 
C)  The American Institute of Certified Public Accountants 
D)  The Financial Accounting Standards Board 
E)  Sarbanes-Oxley Act of 2002

Question 19

Bookkeeping is a comprehensive system for collecting, analyzing, and communicating financial information.

Accepted Answer

A) True 
 B)False

Question 20

What is a leveraged buyout?

Accepted Answer

In a leveraged buyout, a firm takes on s

What distinguishes the two most commonly used categories of owners' equity?

Who is responsible for developing and gaining support for global accounting standards and gaining support and cooperation to implement those standards?

Which of the following ratios measures a firm's potential earnings?

Which of the following refers to the financial statement detailing a firm's assets, liabilities, and owners' equity?

Which of the following indicates a firm will be able to pay its bills in a satisfactory manner?

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

Which of the following BEST demonstrates cash flow from operations?

What do businesses use to identify, record, and retain financial information, and includes the people, reports, procedures and other resources needed to compile transactions?

Why are efforts to standardize global accounting practices important?

Why is it important to have ethical codes in the field of accounting?

How do certified public accountants ensure a company's financial reports really represent its operations?

Which of the following ratios measures a firm's ability to meet its current debt obligations?

The percentage of liabilities in a company's assets plus the percentage of owners' equity in its assets is always equal to 100.

It is currently very common that a CPA who is hired to audit a firm's finances will also be hired to help design a more efficient financial information system.

Which of the following statements BEST describes the need for global accounting standards?

Which of the following areas of the Certified Fraud Examiner (CFE)exam includes theories of fraud prevention?

Who is responsible for ensuring the accounting information system provides the reports and statements needed for management planning and decision making?

Which of the following requires auditor rotation by prohibiting the same person from being the lead auditor for more than five consecutive years?

Bookkeeping is a comprehensive system for collecting, analyzing, and communicating financial information.

What is a leveraged buyout?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

Understanding Money and the Role of Banking

Managing Business Finances

Filters

Exam 15: The Role of Accountants and Accounting Information

What distinguishes the two most commonly used categories of owners' equity?

Who is responsible for developing and gaining support for global accounting standards and gaining support and cooperation to implement those standards?

Which of the following ratios measures a firm's potential earnings?

Which of the following refers to the financial statement detailing a firm's assets, liabilities, and owners' equity?

Which of the following indicates a firm will be able to pay its bills in a satisfactory manner?

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

Which of the following BEST demonstrates cash flow from operations?

What do businesses use to identify, record, and retain financial information, and includes the people, reports, procedures and other resources needed to compile transactions?

Why are efforts to standardize global accounting practices important?

Why is it important to have ethical codes in the field of accounting?

How do certified public accountants ensure a company's financial reports really represent its operations?

Which of the following ratios measures a firm's ability to meet its current debt obligations?

The percentage of liabilities in a company's assets plus the percentage of owners' equity in its assets is always equal to 100.

It is currently very common that a CPA who is hired to audit a firm's finances will also be hired to help design a more efficient financial information system.

Which of the following statements BEST describes the need for global accounting standards?

Which of the following areas of the Certified Fraud Examiner (CFE)exam includes theories of fraud prevention?

Who is responsible for ensuring the accounting information system provides the reports and statements needed for management planning and decision making?

Which of the following requires auditor rotation by prohibiting the same person from being the lead auditor for more than five consecutive years?

Bookkeeping is a comprehensive system for collecting, analyzing, and communicating financial information.

What is a leveraged buyout?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

Understanding Money and the Role of Banking

Managing Business Finances

Filters