Question 1

Explain the accounting equation.

Accepted Answer

The accounting equation is Assets = Liab

Question 2

Government agencies would be most interested in the output of ________ accountants,while company salespeople would be most interested in the output of ________ accountants.

Accepted Answer

A) public;private 
B) private;public 
C) managerial;financial 
D) financial;managerial 
E) financial;financial 
A) public;private 
B) private;public 
C) managerial;financial 
D) financial;managerial 
E) financial;financial

Question 3

Which of the following is correct with regard to private accountants?

Accepted Answer

A) They are hired by business firms who do not want to use the services of CPAs. 
B) They are employed by business firms in areas such as marketing research,law,and production technology. 
C) They are becoming less common as CPAs become more prominent and skilled. 
D) They are almost exclusively found at the head office of business firms. 
E) They are hired to deal with companies' day-to-day accounting needs. 
A) They are hired by business firms who do not want to use the services of CPAs. 
B) They are employed by business firms in areas such as marketing research,law,and production technology. 
C) They are becoming less common as CPAs become more prominent and skilled. 
D) They are almost exclusively found at the head office of business firms. 
E) They are hired to deal with companies' day-to-day accounting needs.

Question 4

The accounting equation is: assets = liabilities + owners' equity.

Accepted Answer

A) True 
 B)False

Question 5

What is an accountant hired as a salaried employee to deal with a company's day-to-day accounting needs called?

Accepted Answer

A) Private accountant 
B) Public accountant 
C) Corporate accountant 
D) Managerial accountant 
E) In house accountant 
A) Private accountant 
B) Public accountant 
C) Corporate accountant 
D) Managerial accountant 
E) In house accountant

Question 6

Under which condition is owners' equity positive?

Accepted Answer

A) Assets are greater than liabilities. 
B) Assets and liabilities are equal. 
C) Credits exceed debits. 
D) Liabilities are greater than assets. 
E) Debits exceed credits. 
A) Assets are greater than liabilities. 
B) Assets and liabilities are equal. 
C) Credits exceed debits. 
D) Liabilities are greater than assets. 
E) Debits exceed credits.

Question 7

If the following facts were known,which one would strengthen the argument that a company would be able to meet its current financial obligations?

Accepted Answer

A) The level of accounts payable is high. 
B) Liabilities exceed assets. 
C) The company currently has a negative cash flow. 
D) The company needs to increase the number of customers it serves. 
E) Assets exceed liabilities. 
A) The level of accounts payable is high. 
B) Liabilities exceed assets. 
C) The company currently has a negative cash flow. 
D) The company needs to increase the number of customers it serves. 
E) Assets exceed liabilities.

Question 8

The current ratio is used to determine the percentage of sales revenue that is generated by new products,while the earnings per share ratio takes into account sales of both old and new products.

Accepted Answer

A) True 
 B)False

Question 9

Retained earnings equal net profits plus dividend payments to stockholders.

Accepted Answer

A) True 
 B)False

Question 10

If the following facts were known,which one would strengthen the argument that a company is profitable?

Accepted Answer

A) The company's sales revenue is low relative to its cost of goods sold. 
B) The company's cost of goods sold is low relative to its sales revenue. 
C) The number of customers has remained stable for some time. 
D) The company has had the same owners over its lifetime. 
E) The company's selling expenses are high compared to its administrative expenses. 
A) The company's sales revenue is low relative to its cost of goods sold. 
B) The company's cost of goods sold is low relative to its sales revenue. 
C) The number of customers has remained stable for some time. 
D) The company has had the same owners over its lifetime. 
E) The company's selling expenses are high compared to its administrative expenses.

Question 11

What is the purpose of a balance sheet? What are the major types of information shown on the balance sheet?

Accepted Answer

- A balance sheet is a type of financial

Question 12

What does return on equity measure?

Accepted Answer

A) The amount of pre-tax profit earned for each dollar invested 
B) The amount of profit earned for each share of stock 
C) The amount of profit earned for each dollar of previous profit retained in the business 
D) The amount of profit earned for each dollar invested 
E) The amount of pre-tax profit earned for each share of stock 
A) The amount of pre-tax profit earned for each dollar invested 
B) The amount of profit earned for each share of stock 
C) The amount of profit earned for each dollar of previous profit retained in the business 
D) The amount of profit earned for each dollar invested 
E) The amount of pre-tax profit earned for each share of stock

Question 13

The lower the inventory turnover ratio,the higher the efficiency of operations.

Accepted Answer

A) True 
 B)False

Question 14

What types of services did CAs,CGAs,and CMAs provide before the three groups merged? How will the merger change the situation?

Accepted Answer

Services include auditing (examination o

Question 15

The debt-to-owners' equity ratio measures a firm's ability to meet

Accepted Answer

A) dividend payments. 
B) long-term liabilities. 
C) interest payments. 
D) short-term liabilities. 
E) all liabilities. 
A) dividend payments. 
B) long-term liabilities. 
C) interest payments. 
D) short-term liabilities. 
E) all liabilities.

Question 16

Define earnings per share.How do investors use this information?

Accepted Answer

Earnings per share is defined as net inc

Question 17

Owners' equity equals assets plus liabilities.

Accepted Answer

A) True 
 B)False

Question 18

What is the purpose of computing the current ratio?

Accepted Answer

A) To provide investors with some measurement of the returns they can expect from their investment 
B) To measure the extent to which a firm is financed through borrowed money 
C) To measure how much cash the firm has 
D) To measure the firm's ability to meet emergency demands for cash 
E) To measure the firm's ability to meet its current obligations out of its current assets 
A) To provide investors with some measurement of the returns they can expect from their investment 
B) To measure the extent to which a firm is financed through borrowed money 
C) To measure how much cash the firm has 
D) To measure the firm's ability to meet emergency demands for cash 
E) To measure the firm's ability to meet its current obligations out of its current assets

Question 19

Bookkeeping is a comprehensive system for collecting,analyzing,and communicating financial information.

Accepted Answer

A) True 
 B)False

Question 20

What is the formula for determining owners' equity?

Accepted Answer

A) Assets minus liabilities 
B) Assets plus liabilities 
C) Assets minus goodwill 
D) Current assets minus current liabilities 
E) There is no formula for computing owners' equity. 
A) Assets minus liabilities 
B) Assets plus liabilities 
C) Assets minus goodwill 
D) Current assets minus current liabilities 
E) There is no formula for computing owners' equity.

Explain the accounting equation.

Government agencies would be most interested in the output of accountants,while company salespeople would be most interested in the output of accountants.

Which of the following is correct with regard to private accountants?

The accounting equation is: assets = liabilities + owners' equity.

What is an accountant hired as a salaried employee to deal with a company's day-to-day accounting needs called?

Under which condition is owners' equity positive?

If the following facts were known,which one would strengthen the argument that a company would be able to meet its current financial obligations?

The current ratio is used to determine the percentage of sales revenue that is generated by new products,while the earnings per share ratio takes into account sales of both old and new products.

Retained earnings equal net profits plus dividend payments to stockholders.

If the following facts were known,which one would strengthen the argument that a company is profitable?

What is the purpose of a balance sheet? What are the major types of information shown on the balance sheet?

What does return on equity measure?

The lower the inventory turnover ratio,the higher the efficiency of operations.

What types of services did CAs,CGAs,and CMAs provide before the three groups merged? How will the merger change the situation?

The debt-to-owners' equity ratio measures a firm's ability to meet

Define earnings per share.How do investors use this information?

Owners' equity equals assets plus liabilities.

What is the purpose of computing the current ratio?

Bookkeeping is a comprehensive system for collecting,analyzing,and communicating financial information.

What is the formula for determining owners' equity?

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

Explain the accounting equation.

Government agencies would be most interested in the output of ________ accountants,while company salespeople would be most interested in the output of ________ accountants.

Which of the following is correct with regard to private accountants?

The accounting equation is: assets = liabilities + owners' equity.

What is an accountant hired as a salaried employee to deal with a company's day-to-day accounting needs called?

Under which condition is owners' equity positive?

If the following facts were known,which one would strengthen the argument that a company would be able to meet its current financial obligations?

The current ratio is used to determine the percentage of sales revenue that is generated by new products,while the earnings per share ratio takes into account sales of both old and new products.

Retained earnings equal net profits plus dividend payments to stockholders.

If the following facts were known,which one would strengthen the argument that a company is profitable?

What is the purpose of a balance sheet? What are the major types of information shown on the balance sheet?

What does return on equity measure?

The lower the inventory turnover ratio,the higher the efficiency of operations.

What types of services did CAs,CGAs,and CMAs provide before the three groups merged? How will the merger change the situation?

The debt-to-owners' equity ratio measures a firm's ability to meet

Define earnings per share.How do investors use this information?

Owners' equity equals assets plus liabilities.

What is the purpose of computing the current ratio?

Bookkeeping is a comprehensive system for collecting,analyzing,and communicating financial information.

What is the formula for determining owners' equity?

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

Government agencies would be most interested in the output of accountants,while company salespeople would be most interested in the output of accountants.