Question 1

The sole purpose of accounting is to help managers evaluate the financial condition of the firm so that they may make better decisions.

Accepted Answer

A) True 
 B)False

Question 2

The __________ ratio is a commonly used leverage ratio.

Accepted Answer

A) acid test 
B) debt to owners' equity 
C) current 
D) inventory turnover 
A) acid test 
B) debt to owners' equity 
C) current 
D) inventory turnover

Question 3

Although a firm may choose from a variety of different amortization and inventory valuation methods,it is expected to provide readers of its financial statements with information about the methods it uses.

Accepted Answer

A) True 
 B)False

Question 4

During a period of rising prices,FIFO (first in,first out)inventory valuation method will result in ________ net income figures than would LIFO (last in,first out).

Accepted Answer

A) higher 
B) lower 
C) the same 
D) less accurate 
A) higher 
B) lower 
C) the same 
D) less accurate

Question 5

The best way for a firm to avoid serious cash flow problems is to sustain a rapid growth in sales.

Accepted Answer

A) True 
 B)False

Question 6

When a firm sells merchandise from its inventory,the cost of goods sold it reports will depend on which inventory valuation method it uses.

Accepted Answer

A) True 
 B)False

Question 7

Financial ratios are used to analyze a firm's financial condition and performance.

Accepted Answer

A) True 
 B)False

Question 8

The two major classes of operating expenses are current expenses and long-term expenses.

Accepted Answer

A) True 
 B)False

Question 9

Accounting has been called the language of business.

Accepted Answer

A) True 
 B)False

Question 10

Identify and explain the differences between LIFO and FIFO inventory valuation methods.How might a firm use these accounting techniques to affect its accounting information?

Accepted Answer

FIFO stands for first-in,first-out.This

Question 11

The Sarbanes-Oxley Act applies to all U.S.companies.

Accepted Answer

A) True 
 B)False

Question 12

In reviewing the financial results for the past month,the president of the company is surprised at how low the sales amount is.She is wondering if all sales for the month have been properly recorded.When asked to investigate this issue,the accountant would refer to the

Accepted Answer

A) income statement. 
B) balance sheet. 
C) ledger. 
D) trial balance. 
A) income statement. 
B) balance sheet. 
C) ledger. 
D) trial balance.

Question 13

As Canadian firms focus on cutting costs in order to stay competitive with producers in low-wage countries,________ will gain importance.

Accepted Answer

A) managerial accounting 
B) financial accounting 
C) tax accounting 
D) auditing 
A) managerial accounting 
B) financial accounting 
C) tax accounting 
D) auditing

Question 14

A firm that takes on too much debt could experience problems repaying its lenders or meeting promises made to stockholders.

Accepted Answer

A) True 
 B)False

Question 15

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

Accepted Answer

A) True 
 B)False

Question 16

A bookkeeper's first task is to record the firm's transactions in a journal.

Accepted Answer

A) True 
 B)False

Question 17

Cash provided by the sale of new cars at Joseph's Car Sales would be listed as a cash inflow from operations on Joseph's statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 18

Profitability ratios are often used to measure management's performance.

Accepted Answer

A) True 
 B)False

Question 19

Calgary Chemicals plans to utilize its computers to provide continuous auditing of their financial statements.One obvious benefit of this technology would be:

Accepted Answer

A) a reduction in the number of accountants required by the firm. 
B) less scrutiny from agencies such as Revenue Canada. 
C) to shift financial decision making from human beings to programmed technology. 
D) early detection of financial problems. 
A) a reduction in the number of accountants required by the firm. 
B) less scrutiny from agencies such as Revenue Canada. 
C) to shift financial decision making from human beings to programmed technology. 
D) early detection of financial problems.

Question 20

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

Accepted Answer

A) True 
 B)False

The sole purpose of accounting is to help managers evaluate the financial condition of the firm so that they may make better decisions.

The __________ ratio is a commonly used leverage ratio.

Although a firm may choose from a variety of different amortization and inventory valuation methods,it is expected to provide readers of its financial statements with information about the methods it uses.

During a period of rising prices,FIFO (first in,first out)inventory valuation method will result in ________ net income figures than would LIFO (last in,first out).

The best way for a firm to avoid serious cash flow problems is to sustain a rapid growth in sales.

When a firm sells merchandise from its inventory,the cost of goods sold it reports will depend on which inventory valuation method it uses.

Financial ratios are used to analyze a firm's financial condition and performance.

The two major classes of operating expenses are current expenses and long-term expenses.

Accounting has been called the language of business.

Identify and explain the differences between LIFO and FIFO inventory valuation methods.How might a firm use these accounting techniques to affect its accounting information?

The Sarbanes-Oxley Act applies to all U.S.companies.

In reviewing the financial results for the past month,the president of the company is surprised at how low the sales amount is.She is wondering if all sales for the month have been properly recorded.When asked to investigate this issue,the accountant would refer to the

As Canadian firms focus on cutting costs in order to stay competitive with producers in low-wage countries,________ will gain importance.

A firm that takes on too much debt could experience problems repaying its lenders or meeting promises made to stockholders.

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

A bookkeeper's first task is to record the firm's transactions in a journal.

Cash provided by the sale of new cars at Joseph's Car Sales would be listed as a cash inflow from operations on Joseph's statement of cash flows.

Profitability ratios are often used to measure management's performance.

Calgary Chemicals plans to utilize its computers to provide continuous auditing of their financial statements.One obvious benefit of this technology would be:

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Financial Management

The Financial Services Industry in Canada

Filters

Exam 16: Understanding Accounting and Financial Information

The sole purpose of accounting is to help managers evaluate the financial condition of the firm so that they may make better decisions.

The __________ ratio is a commonly used leverage ratio.

Although a firm may choose from a variety of different amortization and inventory valuation methods,it is expected to provide readers of its financial statements with information about the methods it uses.

During a period of rising prices,FIFO (first in,first out)inventory valuation method will result in ________ net income figures than would LIFO (last in,first out).

The best way for a firm to avoid serious cash flow problems is to sustain a rapid growth in sales.

When a firm sells merchandise from its inventory,the cost of goods sold it reports will depend on which inventory valuation method it uses.

Financial ratios are used to analyze a firm's financial condition and performance.

The two major classes of operating expenses are current expenses and long-term expenses.

Accounting has been called the language of business.

Identify and explain the differences between LIFO and FIFO inventory valuation methods.How might a firm use these accounting techniques to affect its accounting information?

The Sarbanes-Oxley Act applies to all U.S.companies.

In reviewing the financial results for the past month,the president of the company is surprised at how low the sales amount is.She is wondering if all sales for the month have been properly recorded.When asked to investigate this issue,the accountant would refer to the

As Canadian firms focus on cutting costs in order to stay competitive with producers in low-wage countries,________ will gain importance.

A firm that takes on too much debt could experience problems repaying its lenders or meeting promises made to stockholders.

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

A bookkeeper's first task is to record the firm's transactions in a journal.

Cash provided by the sale of new cars at Joseph's Car Sales would be listed as a cash inflow from operations on Joseph's statement of cash flows.

Profitability ratios are often used to measure management's performance.

Calgary Chemicals plans to utilize its computers to provide continuous auditing of their financial statements.One obvious benefit of this technology would be:

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

Taking Risks and Making Profits Within the Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Understanding Employeemanagement Issues and Relations

Marketing: Building Customer and Stakeholder Relationships

Managing the Marketing Mix: Product, Price, Place, and Promotion

Financial Management

The Financial Services Industry in Canada

Filters