Question 1

If you wanted to see how much Mega Computer owed your company,where would be the best place to look?

Accepted Answer

A) Income statement 
B) Balance sheet 
C) Cash flow statement 
D) Budget 
E) Net income statement 
A) Income statement 
B) Balance sheet 
C) Cash flow statement 
D) Budget 
E) Net income statement B

Question 2

The field of accounting that is concerned with external users of a company's financial information is called

Accepted Answer

A) managerial accounting. 
B) bookkeeping. 
C) public accounting. 
D) financial accounting. 
E) auditing. 
A) managerial accounting. 
B) bookkeeping. 
C) public accounting. 
D) financial accounting. 
E) auditing. D

Question 3

Which of the following is correct with respect to accounting ethics?

Accepted Answer

A) It is difficult for one person to make a difference;rather,what is required is organization-wide action to ensure ethical accounting behaviour. 
B) The ultimate purpose of strong ethical standards in accounting is to maintain public confidence in business institutions and financial markets. 
C) The U.S.CPA Code of Ethics does not address the conflict of interest problem. 
D) To date,there has been no legislation passed in either the United States or Canada which is designed to ensure that the general public has confidence in the work of accountants. 
E) All of these are correct. 
A) It is difficult for one person to make a difference;rather,what is required is organization-wide action to ensure ethical accounting behaviour. 
B) The ultimate purpose of strong ethical standards in accounting is to maintain public confidence in business institutions and financial markets. 
C) The U.S.CPA Code of Ethics does not address the conflict of interest problem. 
D) To date,there has been no legislation passed in either the United States or Canada which is designed to ensure that the general public has confidence in the work of accountants. 
E) All of these are correct. B

Question 4

David is an accountant who calls attention to problems and helps managers carry out the planning,decision making,and controlling functions.David is involved in ________ accounting.

Accepted Answer

A) budgeting 
B) financial 
C) auditing 
D) managerial 
E) generally accepted accounting principles 
A) budgeting 
B) financial 
C) auditing 
D) managerial 
E) generally accepted accounting principles

Question 5

What are assets that have long-term use or value to the firm,such as land,buildings and machinery called?

Accepted Answer

A) Intangible assets 
B) Variable assets 
C) Fixed assets 
D) Current assets 
E) Structural assets 
A) Intangible assets 
B) Variable assets 
C) Fixed assets 
D) Current assets 
E) Structural assets

Question 6

At Lexi Corp. ,sales revenue is $20 million,the cost of goods sold is $14 million,operating expenses are $3 million,and income taxes are $1 million.What is the company's operating income?

Accepted Answer

A) $6 million 
B) $17 million 
C) $3 million 
D) $2 million 
E) None of these 
A) $6 million 
B) $17 million 
C) $3 million 
D) $2 million 
E) None of these

Question 7

________ is the formal recording and reporting of revenues in financial statements.

Accepted Answer

A) Compliance 
B) Materiality 
C) Full disclosure 
D) Matching 
E) Revenue recognition 
A) Compliance 
B) Materiality 
C) Full disclosure 
D) Matching 
E) Revenue recognition

Question 8

Who are the users of financial statements? Why would they be interested in these statements?

Accepted Answer

- Business managers: to set goals,develo

Question 9

At the end of the fiscal year for Santos Industrial Machinery,management raised concerns about the company's financial performance.The company's accountants have been asked to analyze the current financial state of the company by using ratio analysis. Santos needs to assess its debt situation with respect to the value of the company.Which of the following,if true,would most strengthen the case that Santos's debt is manageable?

Accepted Answer

A) Santos has a high profitability ratio. 
B) Santos has a high inventory turnover ratio. 
C) Santos has a low inventory turnover ratio. 
D) Santos has a high debt-to-owners'-equity ratio. 
E) Santos has a low debt-to-owners'-equity ratio. 
A) Santos has a high profitability ratio. 
B) Santos has a high inventory turnover ratio. 
C) Santos has a low inventory turnover ratio. 
D) Santos has a high debt-to-owners'-equity ratio. 
E) Santos has a low debt-to-owners'-equity ratio.

Question 10

Suppose a company unexpectedly receives a huge order for its main product.To cope with this,the owner borrows money to rent an additional facility to fill the orders and to pay the temporary workers who will produce the large order.The owner does this hoping that the additional costs will be more than covered by the revenue from selling the additional units of the product.Which ratio will be most affected by these decisions?

Accepted Answer

A) The short-term solvency ratio 
B) The long-term solvency ratio 
C) The profitability ratio 
D) The activity ratio 
E) The equity ratio 
A) The short-term solvency ratio 
B) The long-term solvency ratio 
C) The profitability ratio 
D) The activity ratio 
E) The equity ratio

Question 11

How do accountants define merchandise inventory?

Accepted Answer

Merchandise inventory is the c

Question 12

The income statement details a firm's yearly cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the most commonly used liquidity ratio?

Accepted Answer

A) Return on equity 
B) Return on sales 
C) Current ratio 
D) Quick ratio 
E) They are all equally used. 
A) Return on equity 
B) Return on sales 
C) Current ratio 
D) Quick ratio 
E) They are all equally used.

Question 14

The controller is a company's chief accounting officer.

Accepted Answer

A) True 
 B)False

Question 15

How is the return on equity ratio calculated?

Accepted Answer

A) Operation income divided by retained earnings 
B) Net income divided by retained earnings 
C) Net income divided by total owners' equity 
D) Operating income divided by total owners' equity 
E) Net income divided by common stock 
A) Operation income divided by retained earnings 
B) Net income divided by retained earnings 
C) Net income divided by total owners' equity 
D) Operating income divided by total owners' equity 
E) Net income divided by common stock

Question 16

The earnings cycle is complete under two conditions: ________ and ________.

Accepted Answer

A) revenue recognition;matching 
B) the sale is complete;the customer has paid the company 
C) at least two years have passed;the customer has paid the company 
D) the sale is complete;the customer has promised to pay the company 
E) the cost of goods sold has been determined;operating revenues exceed operating expenses 
A) revenue recognition;matching 
B) the sale is complete;the customer has paid the company 
C) at least two years have passed;the customer has paid the company 
D) the sale is complete;the customer has promised to pay the company 
E) the cost of goods sold has been determined;operating revenues exceed operating expenses

Question 17

Explain the three basic financial statements and show how they reflect the activity and financial condition of a business.

Accepted Answer

Accounting summarizes the results of a f

Question 18

Jack wants to compare the earnings per share of two popular high-tech firms.Which formula would Jack use?

Accepted Answer

A) Net income divided by the market value of the common shares 
B) Net income divided by the market value of the preferred shares 
C) Total assets divided by number of common and preferred shares outstanding 
D) Total assets divided by value of common shares outstanding 
E) Net income divided by number of common shares outstanding 
A) Net income divided by the market value of the common shares 
B) Net income divided by the market value of the preferred shares 
C) Total assets divided by number of common and preferred shares outstanding 
D) Total assets divided by value of common shares outstanding 
E) Net income divided by number of common shares outstanding

Question 19

A(n)________ ratio evaluates management's use of assets.

Accepted Answer

A) financial 
B) solvency 
C) activity 
D) profitability 
E) liability 
A) financial 
B) solvency 
C) activity 
D) profitability 
E) liability

Question 20

Intangible assets include patents,trademarks,and copyrights.

Accepted Answer

A) True 
 B)False

If you wanted to see how much Mega Computer owed your company,where would be the best place to look?

The field of accounting that is concerned with external users of a company's financial information is called

Which of the following is correct with respect to accounting ethics?

David is an accountant who calls attention to problems and helps managers carry out the planning,decision making,and controlling functions.David is involved in ________ accounting.

What are assets that have long-term use or value to the firm,such as land,buildings and machinery called?

At Lexi Corp. ,sales revenue is $20 million,the cost of goods sold is $14 million,operating expenses are $3 million,and income taxes are $1 million.What is the company's operating income?

________ is the formal recording and reporting of revenues in financial statements.

Who are the users of financial statements? Why would they be interested in these statements?

How do accountants define merchandise inventory?

The income statement details a firm's yearly cash receipts and cash payments.

Which of the following is the most commonly used liquidity ratio?

The controller is a company's chief accounting officer.

How is the return on equity ratio calculated?

The earnings cycle is complete under two conditions: and .

Explain the three basic financial statements and show how they reflect the activity and financial condition of a business.

Jack wants to compare the earnings per share of two popular high-tech firms.Which formula would Jack use?

A(n)________ ratio evaluates management's use of assets.

Intangible assets include patents,trademarks,and copyrights.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship,small Business,and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating,satisfying,and Leading Employees

Operations Management,productivity,and Quality

Understanding Marketing Principles and Developing Products

Pricing,promoting,and Distributing Products

Money and Banking

Financial Decisions and Risk Management

Filters

Exam 11: Understanding Accounting

If you wanted to see how much Mega Computer owed your company,where would be the best place to look?

The field of accounting that is concerned with external users of a company's financial information is called

Which of the following is correct with respect to accounting ethics?

David is an accountant who calls attention to problems and helps managers carry out the planning,decision making,and controlling functions.David is involved in ________ accounting.

What are assets that have long-term use or value to the firm,such as land,buildings and machinery called?

At Lexi Corp. ,sales revenue is $20 million,the cost of goods sold is $14 million,operating expenses are $3 million,and income taxes are $1 million.What is the company's operating income?

________ is the formal recording and reporting of revenues in financial statements.

Who are the users of financial statements? Why would they be interested in these statements?

How do accountants define merchandise inventory?

The income statement details a firm's yearly cash receipts and cash payments.

Which of the following is the most commonly used liquidity ratio?

The controller is a company's chief accounting officer.

How is the return on equity ratio calculated?

The earnings cycle is complete under two conditions: ________ and ________.

Explain the three basic financial statements and show how they reflect the activity and financial condition of a business.

Jack wants to compare the earnings per share of two popular high-tech firms.Which formula would Jack use?

A(n)________ ratio evaluates management's use of assets.

Intangible assets include patents,trademarks,and copyrights.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship,small Business,and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating,satisfying,and Leading Employees

Operations Management,productivity,and Quality

Understanding Marketing Principles and Developing Products

Pricing,promoting,and Distributing Products

Money and Banking

Financial Decisions and Risk Management

Filters

The earnings cycle is complete under two conditions: and .