Question 1

What happens to assets,liabilities,and owners' equity when a company is operating profitably?

Accepted Answer

Assets increase faster than li

Question 2

Employees and unions use accounting information

Accepted Answer

A) to plan for tax inflows. 
B) to set goals,develop plans,set budgets,and evaluate prospects. 
C) to estimate returns. 
D) to decide if the company is a good credit risk. 
E) to plan for benefits. 
A) to plan for tax inflows. 
B) to set goals,develop plans,set budgets,and evaluate prospects. 
C) to estimate returns. 
D) to decide if the company is a good credit risk. 
E) to plan for benefits.

Question 3

What is the accounting equation?

Accepted Answer

Assets = L

Question 4

Activity ratios are used to determine the amount of sales the company generates each year.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following calculates the cost of goods sold during the period?

Accepted Answer

A) Beginning inventory plus purchases minus ending inventory 
B) Ending inventory minus beginning inventory plus purchases 
C) Purchases minus beginning inventory plus ending inventory 
D) Beginning inventory plus ending inventory minus purchases 
E) (Ending inventory plus beginning inventory)divided by two 
A) Beginning inventory plus purchases minus ending inventory 
B) Ending inventory minus beginning inventory plus purchases 
C) Purchases minus beginning inventory plus ending inventory 
D) Beginning inventory plus ending inventory minus purchases 
E) (Ending inventory plus beginning inventory)divided by two

Question 6

What is the purpose of computing profitability ratios?

Accepted Answer

A) To determine liquidity 
B) To determine the most efficient use of resources 
C) To determine the liquidity of the firm 
D) To determine the potential risk of business activity 
E) To determine the potential returns investors can expect 
A) To determine liquidity 
B) To determine the most efficient use of resources 
C) To determine the liquidity of the firm 
D) To determine the potential risk of business activity 
E) To determine the potential returns investors can expect

Question 7

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 gross profit?

Accepted Answer

A) $6 million 
B) $17 million 
C) $16 million 
D) $2 million 
E) None of these 
A) $6 million 
B) $17 million 
C) $16 million 
D) $2 million 
E) None of these

Question 8

What is goodwill?

Accepted Answer

Goodwill is the amou

Question 9

Liabilities reflected on the balance sheet are divided into two general categories: current (debts to be paid within one year)and long term (due more than a year into the future).

Accepted Answer

A) True 
 B)False

Question 10

According to the accounting equation,if assets equal $4000 and liabilities equal $1500,then owner's equity would equal

Accepted Answer

A) $5500. 
B) $2500. 
C) $3500. 
D) $8000. 
E) It is not possible to tell with the information given. 
A) $5500. 
B) $2500. 
C) $3500. 
D) $8000. 
E) It is not possible to tell with the information given.

Question 11

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 are retained earnings?

Accepted Answer

A) $6 million 
B) $17 million 
C) $3 million 
D) $2 million 
E) It is not possible to tell with the information provided. 
A) $6 million 
B) $17 million 
C) $3 million 
D) $2 million 
E) It is not possible to tell with the information provided.

Question 12

A(n)________ is any economic resource expected to benefit a firm or the individual who owns it.

Accepted Answer

A) owners' equity 
B) asset 
C) debit 
D) liability 
E) credit 
A) owners' equity 
B) asset 
C) debit 
D) liability 
E) credit

Question 13

What is the individual who manages all the firm's accounting activities called?

Accepted Answer

A) Accountant 
B) Controller 
C) Bookkeeper 
D) Auditor 
E) Data analyst 
A) Accountant 
B) Controller 
C) Bookkeeper 
D) Auditor 
E) Data analyst

Question 14

Forensic accountants are sometimes used to

Accepted Answer

A) ensure that the accounting system adheres to GAAP. 
B) track down hidden funds in business firms. 
C) ensure auditors follow auditing standards. 
D) ensure businesses remain profitable. 
E) do all of these. 
A) ensure that the accounting system adheres to GAAP. 
B) track down hidden funds in business firms. 
C) ensure auditors follow auditing standards. 
D) ensure businesses remain profitable. 
E) do all of these.

Question 15

A company ends the year with a net income of $7.5 million and earnings per share of $1.50.What is the number of common shares outstanding for this company?

Accepted Answer

A) 3 million 
B) 4.5 million 
C) 5 million 
D) 6.5 million 
E) 11.25 million 
A) 3 million 
B) 4.5 million 
C) 5 million 
D) 6.5 million 
E) 11.25 million

Question 16

What is the formula for inventory turnover?

Accepted Answer

Cost of go

Question 17

Kershner says: "Our income statement should be looking good this year.We've been doing excellent business this year,so we have a lot of gross sales.The company should be in good shape." Michaels replies: "It remains to be seen how our income statement will look overall.Despite strong sales revenue,the overall income statement might not be as good as we might hope."
Which of the following does Michaels assume?

Accepted Answer

A) Revenues this year were not as high as last year's. 
B) Revenues are not as high as Kershner thinks they are. 
C) Selling expenses exceeded administrative expenses this year. 
D) Other factors must be considered to arrive at an income statement. 
E) Income taxes will be high this year. 
A) Revenues this year were not as high as last year's. 
B) Revenues are not as high as Kershner thinks they are. 
C) Selling expenses exceeded administrative expenses this year. 
D) Other factors must be considered to arrive at an income statement. 
E) Income taxes will be high this year.

Question 18

What is the primary thing the inventory turnover ratio says about a business?

Accepted Answer

A) How profitable it is 
B) How risky it is 
C) How much inventory it has 
D) How much average inventory it has 
E) How often new merchandise replaces old merchandise 
A) How profitable it is 
B) How risky it is 
C) How much inventory it has 
D) How much average inventory it has 
E) How often new merchandise replaces old merchandise

Question 19

An asset is

Accepted Answer

A) the amount of money originally invested in a business by its owners. 
B) the amount of money that owners would receive if they sold all a firm's assets and paid all of its liabilities. 
C) the profits earned by and reinvested in the company. 
D) any economic resource expected to benefit a firm or an individual who owns it. 
E) a debt owed by a firm to an outside organization or individual. 
A) the amount of money originally invested in a business by its owners. 
B) the amount of money that owners would receive if they sold all a firm's assets and paid all of its liabilities. 
C) the profits earned by and reinvested in the company. 
D) any economic resource expected to benefit a firm or an individual who owns it. 
E) a debt owed by a firm to an outside organization or individual.

Question 20

Paid-in capital is

Accepted Answer

A) a debt that must be paid within the year. 
B) the process of distributing the cost of an asset over its useful life. 
C) the amount paid for an existing business above the value of its other assets. 
D) a debt that is not due for at least one year. 
E) additional money,above proceeds from a stock sale,paid directly to a firm by its owners. 
A) a debt that must be paid within the year. 
B) the process of distributing the cost of an asset over its useful life. 
C) the amount paid for an existing business above the value of its other assets. 
D) a debt that is not due for at least one year. 
E) additional money,above proceeds from a stock sale,paid directly to a firm by its owners.

What happens to assets,liabilities,and owners' equity when a company is operating profitably?

Employees and unions use accounting information

What is the accounting equation?

Activity ratios are used to determine the amount of sales the company generates each year.

Which of the following calculates the cost of goods sold during the period?

What is the purpose of computing profitability ratios?

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 gross profit?

What is goodwill?

Liabilities reflected on the balance sheet are divided into two general categories: current (debts to be paid within one year)and long term (due more than a year into the future).

According to the accounting equation,if assets equal $4000 and liabilities equal $1500,then owner's equity would equal

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 are retained earnings?

A(n)________ is any economic resource expected to benefit a firm or the individual who owns it.

What is the individual who manages all the firm's accounting activities called?

Forensic accountants are sometimes used to

A company ends the year with a net income of $7.5 million and earnings per share of $1.50.What is the number of common shares outstanding for this company?

What is the formula for inventory turnover?

What is the primary thing the inventory turnover ratio says about a business?

An asset is

Paid-in capital is

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

What happens to assets,liabilities,and owners' equity when a company is operating profitably?

Employees and unions use accounting information

What is the accounting equation?

Activity ratios are used to determine the amount of sales the company generates each year.

Which of the following calculates the cost of goods sold during the period?

What is the purpose of computing profitability ratios?

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 gross profit?

What is goodwill?

Liabilities reflected on the balance sheet are divided into two general categories: current (debts to be paid within one year)and long term (due more than a year into the future).

According to the accounting equation,if assets equal $4000 and liabilities equal $1500,then owner's equity would equal

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 are retained earnings?

A(n)________ is any economic resource expected to benefit a firm or the individual who owns it.

What is the individual who manages all the firm's accounting activities called?

Forensic accountants are sometimes used to

A company ends the year with a net income of $7.5 million and earnings per share of $1.50.What is the number of common shares outstanding for this company?

What is the formula for inventory turnover?

What is the primary thing the inventory turnover ratio says about a business?

An asset is

Paid-in capital is

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