Exam 11: Understanding Accounting

The process of distributing the cost of an asset over its life is known as licensing. subtracting methods. cost averaging. prepaid expenses. depreciation.

What is the difference between public and private accountants?

Which of the following is the most commonly used liquidity ratio? Return on equity Return on sales Current ratio Quick ratio They are all equally used

The equity that a homeowner has in a house is the amount of money that could be made by selling the house and paying off the mortgage. This idea is similar to the idea of owners' equity in a business.

Why has accounting ethics become an important issue in recent years?

____________ is the comprehensive information system for collecting, analyzing, and communicating financial information, while _____________ is the recording of financial transactions. Financial accounting; managerial accounting Managerial accounting; financial accounting Bookkeeping; accounting Accounting; bookkeeping Controlling; accounting

What do activity ratios show?

Julie, a recent college graduate, is interested in business and is considering pursuing a career in accounting. Her parents are supportive, with her mother recommending that Julie become a public accountant and her father recommending that she become a private accountant. Which of the following, if true, would support the position that Julie should consider a specialty field in accounting? Julie wants to eventually pursue an MBA degree. Colleges have different policies on whether specialty accounting courses are required. Julie is interested in financial crimes. Julie is interested in helping a nonprofit organization. Julie wants to work directly for a private company.

What do forensic accountants do?

Owners' equity = assets minus liabilities

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

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

Which of the following ensures that the accounting equation is always kept in balance? Credits Debits Double-entry accounting Balance sheet T-accounts

What does the term "double-entry" accounting mean?

Describe how computing financial ratios can help users get more information from financial statements to determine the financial strengths of a business.

Al Rosen is working as a private investigator of white-collar crimes. He is a GAAP accountant. a financial scanner. a whistleblower. an auditor. a forensic accountant.

A(n) ________ is any economic resource expected to benefit a firm or the individual who owns it. owners' equity asset debit liability credit

Financial accounting is primarily for people outside the firm while managerial accounting is primarily for people inside the firm.

If a company does not produce accurate accounting information, the group that is hurt the most is investors.

Operating income includes the impact of interest and taxes on income.