Question 1

What is a type of financial statement that summarizes a firm's financial position on a particular date in terms of its assets,liabilities and owners' equity called?

Accepted Answer

A) Income statement 
B) Annual report 
C) Balance sheet 
D) Cash flow statement 
E) Statement of owner's equity 
A) Income statement 
B) Annual report 
C) Balance sheet 
D) Cash flow statement 
E) Statement of owner's equity

Question 2

What is the ease and speed with which an asset can be converted to cash called?

Accepted Answer

A) Liquidity 
B) Convertibility 
C) Changeability 
D) Reversibility 
E) Adaptability 
A) Liquidity 
B) Convertibility 
C) Changeability 
D) Reversibility 
E) Adaptability

Question 3

________ are non-physical assets,such as a patent or trademark,that have economic value in the form of expected benefits.

Accepted Answer

A) Intangible assets 
B) Fixed assets 
C) Prepaid assets 
D) Current assets 
E) Long-term assets 
A) Intangible assets 
B) Fixed assets 
C) Prepaid assets 
D) Current assets 
E) Long-term assets

Question 4

If a firm has $1 000 000 in retained earnings,what does this mean?

Accepted Answer

A) That the firm had $2 000 000 at the beginning of year but paid out $1 000 000 during the year in dividends 
B) That the company is owed $1 000 000 by its creditors but has not yet collected the money 
C) That the firm has $1 000 000 in the bank 
D) That the company's net profits less its dividend payments equals $1 000 000 
E) That the company has saved $1 000 000 during the period since the last balance sheet was made up 
A) That the firm had $2 000 000 at the beginning of year but paid out $1 000 000 during the year in dividends 
B) That the company is owed $1 000 000 by its creditors but has not yet collected the money 
C) That the firm has $1 000 000 in the bank 
D) That the company's net profits less its dividend payments equals $1 000 000 
E) That the company has saved $1 000 000 during the period since the last balance sheet was made up

Question 5

Why do business firms have private accountants? What do these individuals do for the company?

Accepted Answer

Private accountants are hired as salarie

Question 6

Carter Industries had net income of $250 000 for the year.They had 50 000 shares of preferred stock and 200 000 shares of common stock outstanding.What is Carter Industries earnings per share?

Accepted Answer

$250 000/2

Question 7

Double-entry accounting is used by private-sector firms,but cannnot be used by public-sector organizations.

Accepted Answer

A) True 
 B)False

Question 8

Who manages the entire firm's accounting activities?

Accepted Answer

A) Venture capitalist 
B) Private accountant 
C) Controller 
D) Public (not chartered)accountant 
E) Auditor 
A) Venture capitalist 
B) Private accountant 
C) Controller 
D) Public (not chartered)accountant 
E) Auditor

Question 9

________ ratios give investors an idea of what returns they can expect on their investment;dividing ________ by total owners' equity is one such ratio.

Accepted Answer

A) Profitability;earnings per share 
B) Long-term liquidity;net income 
C) Activity;average inventory 
D) Short-term liquidity;earnings per share 
E) Profitability;net income 
A) Profitability;earnings per share 
B) Long-term liquidity;net income 
C) Activity;average inventory 
D) Short-term liquidity;earnings per share 
E) Profitability;net income

Question 10

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

Accepted Answer

A) $27 000 
B) $12 000 
C) $19 500 
D) $13 000 
E) None of these 
A) $27 000 
B) $12 000 
C) $19 500 
D) $13 000 
E) None of these

Question 11

Current liabilities consisting of bills owed to suppliers plus wages and taxes due within the upcoming year are known as

Accepted Answer

A) accounts receivable. 
B) accounts payable. 
C) prepaid expenses. 
D) marketable securities. 
E) net liabilities. 
A) accounts receivable. 
B) accounts payable. 
C) prepaid expenses. 
D) marketable securities. 
E) net liabilities.

Question 12

Janice is a bookkeeper.Her primary function would be to

Accepted Answer

A) generate financial statements. 
B) measure business performance. 
C) record accounting transactions. 
D) complete the same tasks as accountants do. 
E) determine the value of the firm to investors. 
A) generate financial statements. 
B) measure business performance. 
C) record accounting transactions. 
D) complete the same tasks as accountants do. 
E) determine the value of the firm to investors.

Question 13

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million.What is its owners' equity?

Accepted Answer

A) $1 million 
B) $2 million 
C) $3 million 
D) $9 million 
E) $12 million 
A) $1 million 
B) $2 million 
C) $3 million 
D) $9 million 
E) $12 million

Question 14

What is the purpose of computing the earnings per share ratio?

Accepted Answer

A) To determine which firm gets the most out of its resources 
B) To determine the net profit margin 
C) To measure a firm's ability to meet its current liabilities 
D) To attract investors 
E) To measure the net income earned by a business for each dollar invested 
A) To determine which firm gets the most out of its resources 
B) To determine the net profit margin 
C) To measure a firm's ability to meet its current liabilities 
D) To attract investors 
E) To measure the net income earned by a business for each dollar invested

Question 15

________ allows financial statement users to see how much net gain results from the assets that had to be given up in order to generate revenues during a given period.

Accepted Answer

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

Question 16

The inventory turnover ratio is calculated by

Accepted Answer

A) dividing cost of goods sold by revenues. 
B) dividing average inventory by cost of goods sold. 
C) dividing revenues by cost of goods sold. 
D) dividing cost of goods sold by average inventory. 
E) dividing revenues by average inventory. 
A) dividing cost of goods sold by revenues. 
B) dividing average inventory by cost of goods sold. 
C) dividing revenues by cost of goods sold. 
D) dividing cost of goods sold by average inventory. 
E) dividing revenues by average inventory.

Question 17

Identify an activity ratio and what it measures.

Accepted Answer

Activity ratios measure management's eff

Question 18

What is the formula for return on equity?

Accepted Answer

Net income

Question 19

Peter,an accountant,enters every transaction in the journal to reflect its impact on assets and its impact on liabilities and owners' equity.He is using

Accepted Answer

A) a double-entry accounting system. 
B) a balance sheet. 
C) a financial ratio. 
D) breakeven analysis. 
E) a financial statement. 
A) a double-entry accounting system. 
B) a balance sheet. 
C) a financial ratio. 
D) breakeven analysis. 
E) a financial statement.

Question 20

In terms of the evolving role of CPAs,which of the following is not true?

Accepted Answer

A) Accountants are increasingly being asked for advice on broad issues including business development and the evaluation of strategic opportunities. 
B) There are now fewer restrictions imposed by geographical boundaries. 
C) CPAs continue to rely on face-to-face interactions at occasional professional meetings. 
D) Accountants are increasingly serving as project managers. 
E) Accountants need to know the nature of the client's business and its competitive environment. 
A) Accountants are increasingly being asked for advice on broad issues including business development and the evaluation of strategic opportunities. 
B) There are now fewer restrictions imposed by geographical boundaries. 
C) CPAs continue to rely on face-to-face interactions at occasional professional meetings. 
D) Accountants are increasingly serving as project managers. 
E) Accountants need to know the nature of the client's business and its competitive environment.

What is a type of financial statement that summarizes a firm's financial position on a particular date in terms of its assets,liabilities and owners' equity called?

What is the ease and speed with which an asset can be converted to cash called?

________ are non-physical assets,such as a patent or trademark,that have economic value in the form of expected benefits.

If a firm has $1 000 000 in retained earnings,what does this mean?

Why do business firms have private accountants? What do these individuals do for the company?

Carter Industries had net income of $250 000 for the year.They had 50 000 shares of preferred stock and 200 000 shares of common stock outstanding.What is Carter Industries earnings per share?

Double-entry accounting is used by private-sector firms,but cannnot be used by public-sector organizations.

Who manages the entire firm's accounting activities?

ratios give investors an idea of what returns they can expect on their investment;dividing by total owners' equity is one such ratio.

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

Current liabilities consisting of bills owed to suppliers plus wages and taxes due within the upcoming year are known as

Janice is a bookkeeper.Her primary function would be to

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million.What is its owners' equity?

What is the purpose of computing the earnings per share ratio?

________ allows financial statement users to see how much net gain results from the assets that had to be given up in order to generate revenues during a given period.

The inventory turnover ratio is calculated by

Identify an activity ratio and what it measures.

What is the formula for return on equity?

Peter,an accountant,enters every transaction in the journal to reflect its impact on assets and its impact on liabilities and owners' equity.He is using

In terms of the evolving role of CPAs,which of the following is not true?

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 a type of financial statement that summarizes a firm's financial position on a particular date in terms of its assets,liabilities and owners' equity called?

What is the ease and speed with which an asset can be converted to cash called?

________ are non-physical assets,such as a patent or trademark,that have economic value in the form of expected benefits.

If a firm has $1 000 000 in retained earnings,what does this mean?

Why do business firms have private accountants? What do these individuals do for the company?

Carter Industries had net income of $250 000 for the year.They had 50 000 shares of preferred stock and 200 000 shares of common stock outstanding.What is Carter Industries earnings per share?

Double-entry accounting is used by private-sector firms,but cannnot be used by public-sector organizations.

Who manages the entire firm's accounting activities?

________ ratios give investors an idea of what returns they can expect on their investment;dividing ________ by total owners' equity is one such ratio.

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

Current liabilities consisting of bills owed to suppliers plus wages and taxes due within the upcoming year are known as

Janice is a bookkeeper.Her primary function would be to

A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million.What is its owners' equity?

What is the purpose of computing the earnings per share ratio?

________ allows financial statement users to see how much net gain results from the assets that had to be given up in order to generate revenues during a given period.

The inventory turnover ratio is calculated by

Identify an activity ratio and what it measures.

What is the formula for return on equity?

Peter,an accountant,enters every transaction in the journal to reflect its impact on assets and its impact on liabilities and owners' equity.He is using

In terms of the evolving role of CPAs,which of the following is not true?

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

ratios give investors an idea of what returns they can expect on their investment;dividing by total owners' equity is one such ratio.