Question 1

What is the difference between "profit" and "cash flow"?

Accepted Answer

A) Profit refers to what is left after expenses have been subtracted from revenues,while cash flow refers to cash receipts and cash payments. 
B) A firm cannot make a profit unless its cash flow is positive. 
C) A firm can maximize its profit only at the expense of cash flow. 
D) A firm can maximize its cash flow only at the expense of its profit. 
E) There is no real difference between profit and cash flow. 
A) Profit refers to what is left after expenses have been subtracted from revenues,while cash flow refers to cash receipts and cash payments. 
B) A firm cannot make a profit unless its cash flow is positive. 
C) A firm can maximize its profit only at the expense of cash flow. 
D) A firm can maximize its cash flow only at the expense of its profit. 
E) There is no real difference between profit and cash flow.

Question 2

The most important user of accounting information is the government.

Accepted Answer

A) True 
 B)False

Question 3

Streeter & Sons is a regional service company that has been in business for a few years but has not employed a controller or anyone else full-time to keep track of its financial state.The company needs to take a good look at its financial state to determine whether it needs to make any changes in its practices,in order to prevent possible financial meltdown. Which of the following,if true,would strengthen the case that Streeter & Sons 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 company has had the same number of customers for some time. 
D) The company has had the same owners over its lifetime. 
E) The company's selling expenses are high relative 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 company has had the same number of customers for some time. 
D) The company has had the same owners over its lifetime. 
E) The company's selling expenses are high relative to its administrative expenses.

Question 4

What is the difference between public and private accountants?

Accepted Answer

Public accountants work in accounting fi

Question 5

What is using borrowed funds to make purchases,thus increasing the user's purchasing power,potential rate of return and risk of loss called?

Accepted Answer

A) Pledging 
B) Factoring 
C) Bridging 
D) Leverage 
E) Credit 
A) Pledging 
B) Factoring 
C) Bridging 
D) Leverage 
E) Credit

Question 6

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Accepted Answer

A) True 
 B)False

Question 7

Accounting and bookkeeping are essentially synonymous.

Accepted Answer

A) True 
 B)False

Question 8

Net income is a firm's gross profit less its operating expenses and income taxes.

Accepted Answer

A) True 
 B)False

Question 9

Marla is a private accountant who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

Accepted Answer

A) True 
 B)False

Question 10

Cash flow from operations refers to

Accepted Answer

A) money received from borrowing or issuing stock. 
B) cash transactions from buying and selling goods and services. 
C) cash used in,or provided by,investing. 
D) the cash outflow required to pay dividends. 
E) all of these. 
A) money received from borrowing or issuing stock. 
B) cash transactions from buying and selling goods and services. 
C) cash used in,or provided by,investing. 
D) the cash outflow required to pay dividends. 
E) all of these.

Question 11

Don wants to compute the earnings per share for SFX Ltd.How does he do it?

Accepted Answer

A) Divide sales by the number of common shares outstanding 
B) Divide cost of goods sold by the number of common shares 
C) Divide net income by the number of common shares outstanding 
D) Divide cost of goods sold by average inventory 
E) Divide net income by sales 
A) Divide sales by the number of common shares outstanding 
B) Divide cost of goods sold by the number of common shares 
C) Divide net income by the number of common shares outstanding 
D) Divide cost of goods sold by average inventory 
E) Divide net income by sales

Question 12

What is a budget?

Accepted Answer

A budget is a detailed stateme

Question 13

What is the difference between operating income and net income?

Accepted Answer

Operating income is income bef

Question 14

What are costs incurred by a firm other than those included in cost of goods sold called?

Accepted Answer

A) Sales expenses 
B) Merchandise expenses 
C) Miscellaneous expenses 
D) Administrative expenses 
E) Operating expenses 
A) Sales expenses 
B) Merchandise expenses 
C) Miscellaneous expenses 
D) Administrative expenses 
E) Operating expenses

Question 15

Janice is a private accountant.The first thing she must do when working through the accounting cycle is to

Accepted Answer

A) record transactions in a journal. 
B) do a trial balance. 
C) analyze transaction documents. 
D) analyze the financial statements using ratio analysis. 
E) transfer entries from the journal to the ledger. 
A) record transactions in a journal. 
B) do a trial balance. 
C) analyze transaction documents. 
D) analyze the financial statements using ratio analysis. 
E) transfer entries from the journal to the ledger.

Question 16

Which term is used to identify how quickly assets can be converted into cash?

Accepted Answer

A) Acid-test ratio 
B) Activity 
C) Accounts receivable 
D) Current ratio 
E) Liquidity 
A) Acid-test ratio 
B) Activity 
C) Accounts receivable 
D) Current ratio 
E) Liquidity

Question 17

A private accountant deals with a company's day-to-day activities.

Accepted Answer

A) True 
 B)False

Question 18

What is a controller?

Accepted Answer

A controller is the person who

Question 19

The process of distributing the cost of an asset over its life is known as

Accepted Answer

A) licensing. 
B) subtracting methods. 
C) cost averaging. 
D) prepaid expenses. 
E) depreciation. 
A) licensing. 
B) subtracting methods. 
C) cost averaging. 
D) prepaid expenses. 
E) depreciation.

Question 20

Which of the following is designed primarily for internal use by a company's managers (e.g. ,the production manager)?

Accepted Answer

A) Income statements 
B) Statement of retained earnings 
C) Budget 
D) Balance sheets 
E) Statements of cash flow 
A) Income statements 
B) Statement of retained earnings 
C) Budget 
D) Balance sheets 
E) Statements of cash flow

What is the difference between "profit" and "cash flow"?

The most important user of accounting information is the government.

What is the difference between public and private accountants?

What is using borrowed funds to make purchases,thus increasing the user's purchasing power,potential rate of return and risk of loss called?

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Accounting and bookkeeping are essentially synonymous.

Net income is a firm's gross profit less its operating expenses and income taxes.

Marla is a private accountant who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

Cash flow from operations refers to

Don wants to compute the earnings per share for SFX Ltd.How does he do it?

What is a budget?

What is the difference between operating income and net income?

What are costs incurred by a firm other than those included in cost of goods sold called?

Janice is a private accountant.The first thing she must do when working through the accounting cycle is to

Which term is used to identify how quickly assets can be converted into cash?

A private accountant deals with a company's day-to-day activities.

What is a controller?

The process of distributing the cost of an asset over its life is known as

Which of the following is designed primarily for internal use by a company's managers (e.g. ,the production manager)?

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 is the difference between "profit" and "cash flow"?

The most important user of accounting information is the government.

What is the difference between public and private accountants?

What is using borrowed funds to make purchases,thus increasing the user's purchasing power,potential rate of return and risk of loss called?

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Accounting and bookkeeping are essentially synonymous.

Net income is a firm's gross profit less its operating expenses and income taxes.

Marla is a private accountant who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

Cash flow from operations refers to

Don wants to compute the earnings per share for SFX Ltd.How does he do it?

What is a budget?

What is the difference between operating income and net income?

What are costs incurred by a firm other than those included in cost of goods sold called?

Janice is a private accountant.The first thing she must do when working through the accounting cycle is to

Which term is used to identify how quickly assets can be converted into cash?

A private accountant deals with a company's day-to-day activities.

What is a controller?

The process of distributing the cost of an asset over its life is known as

Which of the following is designed primarily for internal use by a company's managers (e.g. ,the production manager)?

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