Question 1

Owners' equity can be found by subtracting liabilities from assets.

Accepted Answer

A) True 
 B)False

Question 2

There are five key working areas in accounting: financial accounting,managerial accounting,auditing,tax accounting,and governmental and not-for-profit accounting.

Accepted Answer

A) True 
 B)False

Question 3

A bookkeeper's first task is to:

Accepted Answer

A) divide all of the firm's transactions into meaningful categories. 
B) prepare the firm's financial statements. 
C) classify and summarize the firm's financial data. 
D) interpret and report data to the firm's management. 
A) divide all of the firm's transactions into meaningful categories. 
B) prepare the firm's financial statements. 
C) classify and summarize the firm's financial data. 
D) interpret and report data to the firm's management.

Question 4

The inventory turnover ratio measures the speed of inventory moving through the firm and its conversion into sales.

Accepted Answer

A) True 
 B)False

Question 5

An income statement reports what a company owns and owes on a certain day.

Accepted Answer

A) True 
 B)False

Question 6

We would expect the inventory turnover ratio for a ski shop to be _______ than the turnover for a convenience store.

Accepted Answer

A) higher 
B) more meaningful 
C) lower 
D) less helpful 
A) higher 
B) more meaningful 
C) lower 
D) less helpful

Question 7

ElecTech Industries had in inventory two transformers,one purchased in February for $11,800 and the other acquired in September for $13,300.In December,they sold one of the transformers to Ram Enterprises for $16,400 and reported a gross margin of $3,100.Tiger Industries evidently uses the ________ inventory valuation method.

Accepted Answer

A) FIFO 
B) LIFO 
C) average 
D) flexplus 
A) FIFO 
B) LIFO 
C) average 
D) flexplus

Question 8

Art works as a private accountant for Conwell AeroSpace.He currently is considering the choice of an amortization method for some new manufacturing equipment.Art should realize that:

Accepted Answer

A) generally accepted accounting practices only allow one amortization method on equipment. 
B) the choice of amortization methods will affect the value of assets on the balance sheet,but will have no impact on net income. 
C) an amortization method that results in a greater amortization charge this year will cause the company's reported net income to be lower. 
D) his choice will have no real impact on the firm's financial statements because amortization is not a true expense,it is simply an information item on the annual report. 
A) generally accepted accounting practices only allow one amortization method on equipment. 
B) the choice of amortization methods will affect the value of assets on the balance sheet,but will have no impact on net income. 
C) an amortization method that results in a greater amortization charge this year will cause the company's reported net income to be lower. 
D) his choice will have no real impact on the firm's financial statements because amortization is not a true expense,it is simply an information item on the annual report.

Question 9

Assets are listed on the balance sheet according to their liquidity.

Accepted Answer

A) True 
 B)False

Question 10

________ is the dollar value of what is received for goods sold,services rendered and money received from other financial sources.

Accepted Answer

A) Revenue 
B) Gross margin 
C) Net income 
D) Cost of goods sold 
A) Revenue 
B) Gross margin 
C) Net income 
D) Cost of goods sold

Question 11

Many managers are concerned with how their decisions affect the "bottom line" of their company's income statement.These managers are concerned with the impact of their decisions on net income.

Accepted Answer

A) True 
 B)False

Question 12

The sixth step in the accounting cycle involves:

Accepted Answer

A) performing a trial balance to verify that the accounting statements are internally consistent. 
B) auditing the books to ensure that they were prepared according to generally accepted accounting principles. 
C) preparing the income statement. 
D) analyzing major accounting statements to evaluate the financial condition of the firm. 
A) performing a trial balance to verify that the accounting statements are internally consistent. 
B) auditing the books to ensure that they were prepared according to generally accepted accounting principles. 
C) preparing the income statement. 
D) analyzing major accounting statements to evaluate the financial condition of the firm.

Question 13

Patents and copyrights are examples of intangible assets.

Accepted Answer

A) True 
 B)False

Question 14

Earnings per share,return on sales,and return on equity are all examples of:

Accepted Answer

A) leverage ratios. 
B) liquidity ratios. 
C) equity ratios. 
D) profitability ratios. 
A) leverage ratios. 
B) liquidity ratios. 
C) equity ratios. 
D) profitability ratios.

Question 15

Accounting involves both the recording and the interpreting of financial events.

Accepted Answer

A) True 
 B)False

Question 16

The financial ratios that measure a firm's ability to pay its short-term debts are called:

Accepted Answer

A) leverage ratios. 
B) liquidity ratios. 
C) equity ratios. 
D) profitability ratios. 
A) leverage ratios. 
B) liquidity ratios. 
C) equity ratios. 
D) profitability ratios.

Question 17

Most businesses use computers to simplify the mechanical aspects involved in accounting.

Accepted Answer

A) True 
 B)False

Question 18

The review and evaluation of the records of a firm that are used to prepare the organization's financial statements is referred to as _____.

Accepted Answer

A) compliance 
B) forensic accounting 
C) managerial accounting 
D) certified bookkeeping 
A) compliance 
B) forensic accounting 
C) managerial accounting 
D) certified bookkeeping

Question 19

Accounting provides information about the financial condition and operating performance of a firm.

Accepted Answer

A) True 
 B)False

Question 20

The acid-test ratio is found by dividing inventory by cost of goods sold.

Accepted Answer

A) True 
 B)False

Owners' equity can be found by subtracting liabilities from assets.

There are five key working areas in accounting: financial accounting,managerial accounting,auditing,tax accounting,and governmental and not-for-profit accounting.

A bookkeeper's first task is to:

The inventory turnover ratio measures the speed of inventory moving through the firm and its conversion into sales.

An income statement reports what a company owns and owes on a certain day.

We would expect the inventory turnover ratio for a ski shop to be _______ than the turnover for a convenience store.

Art works as a private accountant for Conwell AeroSpace.He currently is considering the choice of an amortization method for some new manufacturing equipment.Art should realize that:

Assets are listed on the balance sheet according to their liquidity.

________ is the dollar value of what is received for goods sold,services rendered and money received from other financial sources.

Many managers are concerned with how their decisions affect the "bottom line" of their company's income statement.These managers are concerned with the impact of their decisions on net income.

The sixth step in the accounting cycle involves:

Patents and copyrights are examples of intangible assets.

Earnings per share,return on sales,and return on equity are all examples of:

Accounting involves both the recording and the interpreting of financial events.

The financial ratios that measure a firm's ability to pay its short-term debts are called:

Most businesses use computers to simplify the mechanical aspects involved in accounting.

The review and evaluation of the records of a firm that are used to prepare the organization's financial statements is referred to as _____.

Accounting provides information about the financial condition and operating performance of a firm.

The acid-test ratio is found by dividing inventory by cost of goods sold.

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

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Exam 16: Understanding Accounting and Financial Information

Owners' equity can be found by subtracting liabilities from assets.

There are five key working areas in accounting: financial accounting,managerial accounting,auditing,tax accounting,and governmental and not-for-profit accounting.

A bookkeeper's first task is to:

The inventory turnover ratio measures the speed of inventory moving through the firm and its conversion into sales.

An income statement reports what a company owns and owes on a certain day.

We would expect the inventory turnover ratio for a ski shop to be _______ than the turnover for a convenience store.

Art works as a private accountant for Conwell AeroSpace.He currently is considering the choice of an amortization method for some new manufacturing equipment.Art should realize that:

Assets are listed on the balance sheet according to their liquidity.

________ is the dollar value of what is received for goods sold,services rendered and money received from other financial sources.

Many managers are concerned with how their decisions affect the "bottom line" of their company's income statement.These managers are concerned with the impact of their decisions on net income.

The sixth step in the accounting cycle involves:

Patents and copyrights are examples of intangible assets.

Earnings per share,return on sales,and return on equity are all examples of:

Accounting involves both the recording and the interpreting of financial events.

The financial ratios that measure a firm's ability to pay its short-term debts are called:

Most businesses use computers to simplify the mechanical aspects involved in accounting.

The review and evaluation of the records of a firm that are used to prepare the organization's financial statements is referred to as _____.

Accounting provides information about the financial condition and operating performance of a firm.

The acid-test ratio is found by dividing inventory by cost of goods sold.

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