Question 1

Which of the following documents would MOST likely come from a planning strategy meeting?

Accepted Answer

A)  Income statement 
B)  Flow of cash statement 
C)  Balance sheet 
D)  Budget 
E)  Statement of projected earnings 
A)  Income statement 
B)  Flow of cash statement 
C)  Balance sheet 
D)  Budget 
E)  Statement of projected earnings

Question 2

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its owners' equity?

Accepted Answer

A)  $1 million 
B)  $2 million 
C)  $3 million 
D)  $9 million 
E)  $12 million 
A)  $1 million 
B)  $2 million 
C)  $3 million 
D)  $9 million 
E)  $12 million

Question 3

What type of ratio measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue?

Accepted Answer

A)  Earnings per share 
B)  Debt 
C)  Revenue recognition 
D)  Current 
E)  Activity 
A)  Earnings per share 
B)  Debt 
C)  Revenue recognition 
D)  Current 
E)  Activity

Question 4

For what types of organizations do forensic accountants work?

Accepted Answer

Forensic accountants may be called on by

Question 5

Which of the following represents the accounting equation?

Accepted Answer

A)  Assets = Liabilities + Owners' Equity 
B)  Owners' Equity = Assets + Liability 
C)  Liability = Assets + Owners' Equity 
D)  Assets = Liabilities - Owners' Equity 
E)  Assets = Liabilities × Owners' Equity 
A)  Assets = Liabilities + Owners' Equity 
B)  Owners' Equity = Assets + Liability 
C)  Liability = Assets + Owners' Equity 
D)  Assets = Liabilities - Owners' Equity 
E)  Assets = Liabilities × Owners' Equity

Question 6

Why should there be universal accounting procedures?

Accepted Answer

A)  To allow for the international promotion of CPA 
B)  To allow stakeholders to interpret and compare financial statements accurately 
C)  To ensure conformity to U.S. standards of ethics 
D)  To ensure all multinational firms report information accurately 
E)  To prevent fraudulent business operations 
A)  To allow for the international promotion of CPA 
B)  To allow stakeholders to interpret and compare financial statements accurately 
C)  To ensure conformity to U.S. standards of ethics 
D)  To ensure all multinational firms report information accurately 
E)  To prevent fraudulent business operations

Question 7

The most liquid asset for a firm is marketable securities that can be sold very quickly.

Accepted Answer

A) True 
 B)False

Question 8

If a company's assets exceed its liabilities, owners' equity is negative.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements BEST describes the difference between current and long-term liabilities?

Accepted Answer

A)  Current liabilities are debts that need to be paid immediately, whereas long-term liabilities do not. 
B)  Current liabilities are those which will cost less in debt interest than long-term liabilities. 
C)  Current liabilities are debts that are settled sooner than long-term debts. 
D)  Current liabilities are debts on tangible assets, whereas long-term liabilities are debts on intangible assets. 
E)  Current liabilities are debts on current assets, whereas long-term liabilities are debts on fixed and intangible assets. 
A)  Current liabilities are debts that need to be paid immediately, whereas long-term liabilities do not. 
B)  Current liabilities are those which will cost less in debt interest than long-term liabilities. 
C)  Current liabilities are debts that are settled sooner than long-term debts. 
D)  Current liabilities are debts on tangible assets, whereas long-term liabilities are debts on intangible assets. 
E)  Current liabilities are debts on current assets, whereas long-term liabilities are debts on fixed and intangible assets.

Question 10

Identify the potential users of accounting information.

Accepted Answer

The potential users of accounting inform

Question 11

What is the accounting equation?

Accepted Answer

assets = liabilities + owners'

Question 12

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

Accepted Answer

A)  $2 million 
B)  $3 million 
C)  $5 million 
D)  $7 million 
E)  $8 million 
A)  $2 million 
B)  $3 million 
C)  $5 million 
D)  $7 million 
E)  $8 million

Question 13

The most commonly used liquidity ratio is found by calculating current assets to current liabilities.

Accepted Answer

A) True 
 B)False

Question 14

Explain fixed assets and how accountants spread the cost of an asset over the years of its useful life.

Accepted Answer

Fixed assets (such as land, buildings, a

Question 15

Assets are categorized by the capacity in which they benefit the company.

Accepted Answer

A) True 
 B)False

Question 16

In general, the accounting standards from the IASB and from the U.S. GAAP align nearly perfectly.

Accepted Answer

A) True 
 B)False

Question 17

Owners' equity is net worth minus liabilities.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following terms refers to the difference calculated by subtracting income taxes from the operating income of an organization?

Accepted Answer

A)  Gross revenue 
B)  Net income 
C)  Gross profit 
D)  Cash flow 
E)  Leverage 
A)  Gross revenue 
B)  Net income 
C)  Gross profit 
D)  Cash flow 
E)  Leverage

Question 19

Which of the following encourages accounting professionals to create quality internal controls and financial practices within their organizations?

Accepted Answer

A)  Certified management accountant (CM
A)  
B)  Certified public accountant (CP
A)  
C)  Controller 
D)  Private accountant 
E)  Forensic accountant 
A)  Certified management accountant (CM
A)  
B)  Certified public accountant (CP
A)  
C)  Controller 
D)  Private accountant 
E)  Forensic accountant

Question 20

When valuing assets, the U.S. GAAP allows an asset to be decreased if its value decreases, but cannot be increased if the value increases later. What is the IASB standard for this activity?

Accepted Answer

A)  The value of the asset must remain as initially recorded. 
B)  The value of the asset must be increased annually. 
C)  The value of the asset can be averaged over time. 
D)  The value of the asset can be increased to reflect the increased market value. 
E)  The value of the asset must remain the same for four accounting cycles, then can be changed to reflect current market value. 
A)  The value of the asset must remain as initially recorded. 
B)  The value of the asset must be increased annually. 
C)  The value of the asset can be averaged over time. 
D)  The value of the asset can be increased to reflect the increased market value. 
E)  The value of the asset must remain the same for four accounting cycles, then can be changed to reflect current market value.

Which of the following documents would MOST likely come from a planning strategy meeting?

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its owners' equity?

What type of ratio measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue?

For what types of organizations do forensic accountants work?

Which of the following represents the accounting equation?

Why should there be universal accounting procedures?

The most liquid asset for a firm is marketable securities that can be sold very quickly.

If a company's assets exceed its liabilities, owners' equity is negative.

Which of the following statements BEST describes the difference between current and long-term liabilities?

Identify the potential users of accounting information.

What is the accounting equation?

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

The most commonly used liquidity ratio is found by calculating current assets to current liabilities.

Explain fixed assets and how accountants spread the cost of an asset over the years of its useful life.

Assets are categorized by the capacity in which they benefit the company.

In general, the accounting standards from the IASB and from the U.S. GAAP align nearly perfectly.

Owners' equity is net worth minus liabilities.

Which of the following terms refers to the difference calculated by subtracting income taxes from the operating income of an organization?

Which of the following encourages accounting professionals to create quality internal controls and financial practices within their organizations?

When valuing assets, the U.S. GAAP allows an asset to be decreased if its value decreases, but cannot be increased if the value increases later. What is the IASB standard for this activity?

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

Which of the following documents would MOST likely come from a planning strategy meeting?

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its owners' equity?

What type of ratio measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue?

For what types of organizations do forensic accountants work?

Which of the following represents the accounting equation?

Why should there be universal accounting procedures?

The most liquid asset for a firm is marketable securities that can be sold very quickly.

If a company's assets exceed its liabilities, owners' equity is negative.

Which of the following statements BEST describes the difference between current and long-term liabilities?

Identify the potential users of accounting information.

What is the accounting equation?

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

The most commonly used liquidity ratio is found by calculating current assets to current liabilities.

Explain fixed assets and how accountants spread the cost of an asset over the years of its useful life.

Assets are categorized by the capacity in which they benefit the company.

In general, the accounting standards from the IASB and from the U.S. GAAP align nearly perfectly.

Owners' equity is net worth minus liabilities.

Which of the following terms refers to the difference calculated by subtracting income taxes from the operating income of an organization?

Which of the following encourages accounting professionals to create quality internal controls and financial practices within their organizations?

When valuing assets, the U.S. GAAP allows an asset to be decreased if its value decreases, but cannot be increased if the value increases later. What is the IASB standard for this activity?

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