Question 1

The owner of a jewellery store calculates which of the following by adding up her rent, salary, electricity and phone payments?

Accepted Answer

A)  cost of goods sold 
B)  operating expenses 
C)  gross profit 
D)  revenue 
A)  cost of goods sold 
B)  operating expenses 
C)  gross profit 
D)  revenue

Question 2

Which of the following is true?

Accepted Answer

A)  Comparing both the income statements and the balance sheets shows that SportsAde is the better choice to invest money in. 
B)  Based on the income statements, SportsAde is in a better financial position and you should purchase its stock. 
C)  Based on the balance sheets, SweetFeet is in a better financial position and you should purchase its stock. 
D)  It is necessary to compare both the income statement and the balance sheet to get an accurate picture of the financial health of each company. 
A)  Comparing both the income statements and the balance sheets shows that SportsAde is the better choice to invest money in. 
B)  Based on the income statements, SportsAde is in a better financial position and you should purchase its stock. 
C)  Based on the balance sheets, SweetFeet is in a better financial position and you should purchase its stock. 
D)  It is necessary to compare both the income statement and the balance sheet to get an accurate picture of the financial health of each company.

Question 3

Which of the following is the process of systematically collecting, analyzing, and reporting financial information?

Accepted Answer

A)  accounting 
B)  bookkeeping 
C)  auditing 
D)  financial reporting 
A)  accounting 
B)  bookkeeping 
C)  auditing 
D)  financial reporting

Question 4

As the marketing manager for a yoga studio, you need to know how much you've spent on marketing this year. Which of the following can you use to access a report that will provide this information?

Accepted Answer

A)  sales data 
B)  the income statement 
C)  financial accounting 
D)  managerial accounting 
A)  sales data 
B)  the income statement 
C)  financial accounting 
D)  managerial accounting

Question 5

A small candy company is required to make quarterly payments of withholding taxes to the federal government. What are the upcoming payments called?

Accepted Answer

A)  accounts payable 
B)  accounts receivable 
C)  loans payable 
D)  accrued expenses 
A)  accounts payable 
B)  accounts receivable 
C)  loans payable 
D)  accrued expenses

Question 6

All of the following are acceptable ways of stating the accounting equation EXCEPT which one?

Accepted Answer

A)  owners' equity = assets - liabilities 
B)  assets = liabilities + owners' equity 
C)  owners' equity - liabilities = assets 
D)  assets - liabilities = owners' equity 
A)  owners' equity = assets - liabilities 
B)  assets = liabilities + owners' equity 
C)  owners' equity - liabilities = assets 
D)  assets - liabilities = owners' equity

Question 7

Which of the following assets is the most liquid?

Accepted Answer

A)  accounts receivable 
B)  marketable securities 
C)  cash 
D)  capital 
A)  accounts receivable 
B)  marketable securities 
C)  cash 
D)  capital

Question 8

Which financial statement is characterized as revenues - cost of goods sold - expenses = net income?

Accepted Answer

A)  balance sheet 
B)  statement of cash flows 
C)  statement of financial position 
D)  income statement 
A)  balance sheet 
B)  statement of cash flows 
C)  statement of financial position 
D)  income statement

Question 9

The statement of cash flows offers information on all of the following EXCEPT which one?

Accepted Answer

A)  available cash to pay a company's bills 
B)  expenses during a particular accounting period 
C)  the company's use of cash during the reporting period 
D)  sources of the company's cash during the reporting period 
A)  available cash to pay a company's bills 
B)  expenses during a particular accounting period 
C)  the company's use of cash during the reporting period 
D)  sources of the company's cash during the reporting period

Question 10

All of the following are current assets EXCEPT which one?

Accepted Answer

A)  office equipment 
B)  cash 
C)  prepaid insurance 
D)  accounts receivable 
A)  office equipment 
B)  cash 
C)  prepaid insurance 
D)  accounts receivable

Question 11

Which of the following is a leverage ratio?

Accepted Answer

A)  inventory turnover ratio 
B)  return on sales 
C)  debt-to-equity ratio 
D)  acid-test ratio 
A)  inventory turnover ratio 
B)  return on sales 
C)  debt-to-equity ratio 
D)  acid-test ratio

Question 12

Which report is NOT a financial statement?

Accepted Answer

A)  income statement 
B)  tax return 
C)  balance sheet 
D)  statement of cash flows 
A)  income statement 
B)  tax return 
C)  balance sheet 
D)  statement of cash flows

Question 13

If the assets for your small business are $22,349 and your liabilities are $6,825, what is the owner's equity?

Accepted Answer

A)  $14,128 
B)  $15,524 
C)  $29,174 
D)  $16,394 
A)  $14,128 
B)  $15,524 
C)  $29,174 
D)  $16,394

Question 14

What are the debts owed by a business called?

Accepted Answer

A)  assets 
B)  owners' equity 
C)  liabilities 
D)  revenues 
A)  assets 
B)  owners' equity 
C)  liabilities 
D)  revenues

Question 15

If total liabilities were subtracted from total assets, what would be the residual value?

Accepted Answer

A)  revenues 
B)  owners' equity 
C)  working capital 
D)  expenses 
A)  revenues 
B)  owners' equity 
C)  working capital 
D)  expenses

Question 16

Which of the following is the term for resources that a firm owns?

Accepted Answer

A)  revenues 
B)  owner's equities 
C)  assets 
D)  expenses 
A)  revenues 
B)  owner's equities 
C)  assets 
D)  expenses

Question 17

Angela has a small bed and breakfast (B&B) in a lakeside resort town. If she listed all of the B&B's assets on the balance sheet, which of the following assets would be listed last?

Accepted Answer

A)  furniture and appliances 
B)  cleaning equipment and supplies 
C)  office equipment and supplies 
D)  building 
A)  furniture and appliances 
B)  cleaning equipment and supplies 
C)  office equipment and supplies 
D)  building

Question 18

Suppose a local catering company owes $15,000 on a van it uses for deliveries. The owner's equity is $72,000. What must the value be of the company's owner's equity?

Accepted Answer

A)  $75,000 
B)  $87,000 
C)  $57,000 
D)  $43,000 
A)  $75,000 
B)  $87,000 
C)  $57,000 
D)  $43,000

Question 19

Which of the following presents assets in the correct balance sheet order?

Accepted Answer

A)  marketable securities, equipment, prepaid insurance, inventory 
B)  cash, inventory, equipment 
C)  accounts receivable, buildings, inventory, land 
D)  buildings, prepaid expenses, inventory, equipment 
A)  marketable securities, equipment, prepaid insurance, inventory 
B)  cash, inventory, equipment 
C)  accounts receivable, buildings, inventory, land 
D)  buildings, prepaid expenses, inventory, equipment

Question 20

An automobile manufacturer purchases a piece of new equipment for the factory using cash. The equipment is considered which of the following on the balance sheet?

Accepted Answer

A)  an asset 
B)  owner's equity 
C)  inventory 
D)  a short-term investment 
A)  an asset 
B)  owner's equity 
C)  inventory 
D)  a short-term investment

The owner of a jewellery store calculates which of the following by adding up her rent, salary, electricity and phone payments?

Which of the following is true?

Which of the following is the process of systematically collecting, analyzing, and reporting financial information?

As the marketing manager for a yoga studio, you need to know how much you've spent on marketing this year. Which of the following can you use to access a report that will provide this information?

A small candy company is required to make quarterly payments of withholding taxes to the federal government. What are the upcoming payments called?

All of the following are acceptable ways of stating the accounting equation EXCEPT which one?

Which of the following assets is the most liquid?

Which financial statement is characterized as revenues - cost of goods sold - expenses = net income?

The statement of cash flows offers information on all of the following EXCEPT which one?

All of the following are current assets EXCEPT which one?

Which of the following is a leverage ratio?

Which report is NOT a financial statement?

If the assets for your small business are $22,349 and your liabilities are $6,825, what is the owner's equity?

What are the debts owed by a business called?

If total liabilities were subtracted from total assets, what would be the residual value?

Which of the following is the term for resources that a firm owns?

Angela has a small bed and breakfast (B&B) in a lakeside resort town. If she listed all of the B&B's assets on the balance sheet, which of the following assets would be listed last?

Suppose a local catering company owes $15,000 on a van it uses for deliveries. The owner's equity is $72,000. What must the value be of the company's owner's equity?

Which of the following presents assets in the correct balance sheet order?

An automobile manufacturer purchases a piece of new equipment for the factory using cash. The equipment is considered which of the following on the balance sheet?

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Considering Small Business Entrepreneurship and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating Employees and Teams

Enhancing Employee Management Relations

Building Customer Relationships Through Effective Marketing

Developing and Managing Products

Managing Distribution and Pricing

Developing Integrated Marketing Communications

Exploring Business Technology

Understanding Money Banking and Credit

Recognizing the Basics of Financial Management

Understanding Personal Finance and Investments

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Exam 17: Using Accounting and Financial Information

The owner of a jewellery store calculates which of the following by adding up her rent, salary, electricity and phone payments?

Which of the following is true?

Which of the following is the process of systematically collecting, analyzing, and reporting financial information?

As the marketing manager for a yoga studio, you need to know how much you've spent on marketing this year. Which of the following can you use to access a report that will provide this information?

A small candy company is required to make quarterly payments of withholding taxes to the federal government. What are the upcoming payments called?

All of the following are acceptable ways of stating the accounting equation EXCEPT which one?

Which of the following assets is the most liquid?

Which financial statement is characterized as revenues - cost of goods sold - expenses = net income?

The statement of cash flows offers information on all of the following EXCEPT which one?

All of the following are current assets EXCEPT which one?

Which of the following is a leverage ratio?

Which report is NOT a financial statement?

If the assets for your small business are $22,349 and your liabilities are $6,825, what is the owner's equity?

What are the debts owed by a business called?

If total liabilities were subtracted from total assets, what would be the residual value?

Which of the following is the term for resources that a firm owns?

Angela has a small bed and breakfast (B&B) in a lakeside resort town. If she listed all of the B&B's assets on the balance sheet, which of the following assets would be listed last?

Suppose a local catering company owes $15,000 on a van it uses for deliveries. The owner's equity is $72,000. What must the value be of the company's owner's equity?

Which of the following presents assets in the correct balance sheet order?

An automobile manufacturer purchases a piece of new equipment for the factory using cash. The equipment is considered which of the following on the balance sheet?

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Considering Small Business Entrepreneurship and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating Employees and Teams

Enhancing Employee Management Relations

Building Customer Relationships Through Effective Marketing

Developing and Managing Products

Managing Distribution and Pricing

Developing Integrated Marketing Communications

Exploring Business Technology

Understanding Money Banking and Credit

Recognizing the Basics of Financial Management

Understanding Personal Finance and Investments

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