Question 1

The fundamental accounting equation states that assets equal _______.

Accepted Answer

A) liabilities plus owners' equity 
B) liabilities plus receivables 
C) liabilities minus owners' equity 
D) payables plus cash equivalents 
A) liabilities plus owners' equity 
B) liabilities plus receivables 
C) liabilities minus owners' equity 
D) payables plus cash equivalents

Question 2

Computers today can actually record and analyze data,in addition to printing financial reports.

Accepted Answer

A) True 
 B)False

Question 3

Keith will be graduating from Acadia University this year.He has accumulated $18,000 in student loans during his four years at college.An accountant would classify the loans as:

Accepted Answer

A) liabilities. 
B) intangibles. 
C) assets. 
D) owners' equity. 
A) liabilities. 
B) intangibles. 
C) assets. 
D) owners' equity.

Question 4

The income statement computes net income by subtracting liabilities from assets.

Accepted Answer

A) True 
 B)False

Question 5

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

Accepted Answer

A) True 
 B)False

Question 6

The fundamental accounting equation is as follows: Assets = Liabilities + Owners' equity.

Accepted Answer

A) True 
 B)False

Question 7

Return on sales divides ____ by _.

Accepted Answer

A) net income after tax;total owners' equity 
B) net income;net sales 
C) income;number of shares outstanding 
D) net income;taxes 
A) net income after tax;total owners' equity 
B) net income;net sales 
C) income;number of shares outstanding 
D) net income;taxes

Question 8

The accounting profession is divided into five key working areas,two of which are:

Accepted Answer

A) forecasting and logistical accounting. 
B) auditing and managerial accounting. 
C) inventory control and budgeting. 
D) income accounting and expenditure accounting. 
A) forecasting and logistical accounting. 
B) auditing and managerial accounting. 
C) inventory control and budgeting. 
D) income accounting and expenditure accounting.

Question 9

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 10

A bookkeeper's first task is to:

Accepted Answer

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

Question 11

April works in the accounting department at Henson's Tire & Auto.She is concerned that the company has been placing too many orders for office supplies and wants to look at all of the transactions involving the purchase of office supplies for the past several months.April could find such information by looking at the supplies account in the:

Accepted Answer

A) cash flow statement. 
B) journal. 
C) account debit book. 
D) ledger. 
A) cash flow statement. 
B) journal. 
C) account debit book. 
D) ledger.

Question 12

The first step in the accounting cycle is posting information regarding business transactions into the ledgers.

Accepted Answer

A) True 
 B)False

Question 13

The books where accounting data are first entered are called ledgers.

Accepted Answer

A) True 
 B)False

Question 14

A loan officer at the Saltwater State Bank is considering a loan application from Lanwell Mills.He is concerned about the ability of the company to make repayments if it grants the loan.The loan officer is likely to be very interested in Lanwell's statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is  NOT an area of importance in accounting?

Accepted Answer

A) recording information about financial transactions. 
B) summarizing information about financial transactions. 
C) setting prices for goods and services sold by the organization. 
D) analyzing financial information. 
A) recording information about financial transactions. 
B) summarizing information about financial transactions. 
C) setting prices for goods and services sold by the organization. 
D) analyzing financial information.

Question 16

Use the fundamental accounting equation to solve the following: Assets minus liabilities equals:

Accepted Answer

A) cash reserves. 
B) gross margin. 
C) owners' equity. 
D) net income. 
A) cash reserves. 
B) gross margin. 
C) owners' equity. 
D) net income.

Question 17

The purpose of a trial balance is to:

Accepted Answer

A) prepare a mock up of a real balance sheet. 
B) review the income statement accounts. 
C) meet a reporting requirement of the Securities Exchange Commission (SE
C) . 
D) show whether the figures in the account ledgers are correct and balanced. 
A) prepare a mock up of a real balance sheet. 
B) review the income statement accounts. 
C) meet a reporting requirement of the Securities Exchange Commission (SE
C) . 
D) show whether the figures in the account ledgers are correct and balanced.

Question 18

Good decisions are based on good information.That's why an organization needs accounting-to provide good information.

Accepted Answer

A) True 
 B)False

Question 19

Hap owns and operates a small business with only four full time employees and less than $500 thousand in annual sales.He currently uses a manual accounting system and relies on a part-time bookkeeper to keep his records in order.In evaluating the possible adoption of a computerized accounting system,Hap will probably discover that:

Accepted Answer

A) a computerized system would be affordable,but that he would have little need for it unless his company grew and became significantly larger. 
B) he would be better off hiring a full time accountant. 
C) he could benefit greatly from adopting such a system,but should also consult with an accountant for advice. 
D) the expense of setting up a computerized accounting system would be beyond his financial ability at this time. 
A) a computerized system would be affordable,but that he would have little need for it unless his company grew and became significantly larger. 
B) he would be better off hiring a full time accountant. 
C) he could benefit greatly from adopting such a system,but should also consult with an accountant for advice. 
D) the expense of setting up a computerized accounting system would be beyond his financial ability at this time.

Question 20

An independent audit is an evaluation and unbiased opinion about the accuracy of a company's financial statements.

Accepted Answer

A) True 
 B)False

The fundamental accounting equation states that assets equal _______.

Computers today can actually record and analyze data,in addition to printing financial reports.

Keith will be graduating from Acadia University this year.He has accumulated $18,000 in student loans during his four years at college.An accountant would classify the loans as:

The income statement computes net income by subtracting liabilities from assets.

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

The fundamental accounting equation is as follows: Assets = Liabilities + Owners' equity.

Return on sales divides ____ by _.

The accounting profession is divided into five key working areas,two of which are:

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

A bookkeeper's first task is to:

The first step in the accounting cycle is posting information regarding business transactions into the ledgers.

The books where accounting data are first entered are called ledgers.

A loan officer at the Saltwater State Bank is considering a loan application from Lanwell Mills.He is concerned about the ability of the company to make repayments if it grants the loan.The loan officer is likely to be very interested in Lanwell's statement of cash flows.

Which of the following is NOT an area of importance in accounting?

Use the fundamental accounting equation to solve the following: Assets minus liabilities equals:

The purpose of a trial balance is to:

Good decisions are based on good information.That's why an organization needs accounting-to provide good information.

An independent audit is an evaluation and unbiased opinion about the accuracy of a company's financial statements.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

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

Financial Management Appendix C Managing Risk

The Financial Services Industry in Canada

Filters

Exam 16: Understanding Accounting and Financial Information

The fundamental accounting equation states that assets equal _______.

Computers today can actually record and analyze data,in addition to printing financial reports.

Keith will be graduating from Acadia University this year.He has accumulated $18,000 in student loans during his four years at college.An accountant would classify the loans as:

The income statement computes net income by subtracting liabilities from assets.

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

The fundamental accounting equation is as follows: Assets = Liabilities + Owners' equity.

Return on sales divides ____ by _.

The accounting profession is divided into five key working areas,two of which are:

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

A bookkeeper's first task is to:

The first step in the accounting cycle is posting information regarding business transactions into the ledgers.

The books where accounting data are first entered are called ledgers.

A loan officer at the Saltwater State Bank is considering a loan application from Lanwell Mills.He is concerned about the ability of the company to make repayments if it grants the loan.The loan officer is likely to be very interested in Lanwell's statement of cash flows.

Which of the following is NOT an area of importance in accounting?

Use the fundamental accounting equation to solve the following: Assets minus liabilities equals:

The purpose of a trial balance is to:

Good decisions are based on good information.That's why an organization needs accounting-to provide good information.

An independent audit is an evaluation and unbiased opinion about the accuracy of a company's financial statements.

The Dynamic Business Environment

How Economic Issues Affect Business

Competing in Global Markets

The Role of Government in Business Appendix a Working Within the Legal Environment of Business

Ethics and Social Responsibility

Forms of Business Ownership

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Producing World-Class Goods and Services

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemdashmanagement Issues and Relations

Marketing: Helping Buyers Buy

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

Financial Management Appendix C Managing Risk

The Financial Services Industry in Canada

Filters