Question 1

Working capital refers to the amount of cash an organization has in hand.

Accepted Answer

A) True 
 B)False

Question 2

Total liabilities divided by total assets will yield the ________ ratio.

Accepted Answer

A)  debt-to-equity ratio 
B)  current ratio 
C)  acid-test ratio 
D)  asset turnover ratio 
E)  debt-to-assets ratio 
A)  debt-to-equity ratio 
B)  current ratio 
C)  acid-test ratio 
D)  asset turnover ratio 
E)  debt-to-assets ratio

Question 3

________ is an accounting method in which revenue is recorded when a sale is made and expense is recorded when it is incurred.

Accepted Answer

A)  Accrual basis 
B)  Cash basis 
C)  Profit basis 
D)  Depreciation 
E)  Deferral basis 
A)  Accrual basis 
B)  Cash basis 
C)  Profit basis 
D)  Depreciation 
E)  Deferral basis

Question 4

Which of the following is a key difference between financial accounting and management accounting?

Accepted Answer

A)  Financial accounting is concerned with preparing cost analyses, whereas management accounting is concerned with creating reports. 
B)  Financial accounting considers such aspects as profitability, whereas management accounting does not consider profitability. 
C)  Financial accounting creates information for outsiders, whereas management accounting is for insiders. 
D)  Management accounting is based on historical data, whereas financial accounting is based on real time data. 
E)  Accounting knowledge is crucial to perform management accounting, whereas limited accounting knowledge is sufficient for financial accounting. 
A)  Financial accounting is concerned with preparing cost analyses, whereas management accounting is concerned with creating reports. 
B)  Financial accounting considers such aspects as profitability, whereas management accounting does not consider profitability. 
C)  Financial accounting creates information for outsiders, whereas management accounting is for insiders. 
D)  Management accounting is based on historical data, whereas financial accounting is based on real time data. 
E)  Accounting knowledge is crucial to perform management accounting, whereas limited accounting knowledge is sufficient for financial accounting.

Question 5

Robex Woodworks is a furniture manufacturer.The company has purchased timber worth $5,000 from one of its suppliers and has not paid them yet.This amount is recorded as ________ in the balance sheet.

Accepted Answer

A)  accrued expense 
B)  owners' equity 
C)  supplier's equity 
D)  accounts payable 
E)  deferred expense 
A)  accrued expense 
B)  owners' equity 
C)  supplier's equity 
D)  accounts payable 
E)  deferred expense

Question 6

Assets - Liabilities = ________.

Accepted Answer

A)  variable cost 
B)  fixed cost 
C)  liquidity 
D)  business cost 
E)  owner's equity 
A)  variable cost 
B)  fixed cost 
C)  liquidity 
D)  business cost 
E)  owner's equity

Question 7

The ________ requires that expenses incurred in producing revenues be deducted from the revenue they generated during the same accounting period.

Accepted Answer

A)  principle of prudence 
B)  deferral principle 
C)  materiality principle 
D)  matching principle 
E)  principle of continuity 
A)  principle of prudence 
B)  deferral principle 
C)  materiality principle 
D)  matching principle 
E)  principle of continuity

Question 8

Compare and contrast public accountants and private accountants.

Accepted Answer

Private accountants are in-house account

Question 9

The profit earned or loss incurred by a firm,determined by subtracting expenses from revenues,is referred to as the ________.

Accepted Answer

A)  working capital 
B)  current asset 
C)  net income 
D)  net sales 
E)  gross income 
A)  working capital 
B)  current asset 
C)  net income 
D)  net sales 
E)  gross income

Question 10

Accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

Accepted Answer

A)  statement of financial position 
B)  balance sheet 
C)  cash flow statement 
D)  income statement 
E)  statement of current assets 
A)  statement of financial position 
B)  balance sheet 
C)  cash flow statement 
D)  income statement 
E)  statement of current assets

Question 12

Expenses incurred through marketing and distributing a product are referred to as ________ expenses.

Accepted Answer

A)  organization 
B)  permanent 
C)  general 
D)  selling 
E)  administration 
A)  organization 
B)  permanent 
C)  general 
D)  selling 
E)  administration

Question 13

Which of the following is a key difference between depreciation and amortization?

Accepted Answer

A)  Amortization is applicable for long-term assets, whereas depreciation is applicable for short-term assets. 
B)  Depreciation applies to tangible assets, whereas amortization applies to intangible assets. 
C)  Amortization is calculated for liabilities, whereas depreciation is calculated for assets. 
D)  Amortization is calculated for assets, whereas depreciation is calculated for liabilities. 
E)  Depreciation is applicable for long-term assets, whereas amortization is applicable for short-term assets. 
A)  Amortization is applicable for long-term assets, whereas depreciation is applicable for short-term assets. 
B)  Depreciation applies to tangible assets, whereas amortization applies to intangible assets. 
C)  Amortization is calculated for liabilities, whereas depreciation is calculated for assets. 
D)  Amortization is calculated for assets, whereas depreciation is calculated for liabilities. 
E)  Depreciation is applicable for long-term assets, whereas amortization is applicable for short-term assets.

Question 14

A company has the following assets: (1)Fixed assets worth $30,000 and (2)investments worth $6,000.The company's total liabilities amount to $25,000.What is the owner's equity of the company?

Accepted Answer

A)  $24,000 
B)  $36,000 
C)  $5000 
D)  $30,000 
E)  $11,000 
A)  $24,000 
B)  $36,000 
C)  $5000 
D)  $30,000 
E)  $11,000

Question 15

Jefferson Accounting is an independent accounting firm that provides auditing services for public companies.The firm thoroughly evaluates its clients' financial statements and certifies them.The firm is a(n)________.

Accepted Answer

A)  forensic auditor 
B)  cost accountant 
C)  external auditor 
D)  domestic auditor 
E)  financial analyst 
A)  forensic auditor 
B)  cost accountant 
C)  external auditor 
D)  domestic auditor 
E)  financial analyst

Question 16

Audit is a formal evaluation of the fairness and reliability of a client's financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Describe double-entry bookkeeping and the matching principle.

Accepted Answer

Double-entry bookkeeping is a method of

Question 18

Which of the following is an example of an activity ratio?

Accepted Answer

A)  inventory turnover ratio 
B)  acid-test ratio 
C)  debt-to-equity ratio 
D)  current ratio 
E)  debt-to-assets ratio 
A)  inventory turnover ratio 
B)  acid-test ratio 
C)  debt-to-equity ratio 
D)  current ratio 
E)  debt-to-assets ratio

Question 19

You are planning to invest in a real estate firm.You want to analyze the firm's financial strengths in terms of the overall assets and liabilities.Which of the following reports is best suited to estimate this on a particular date?

Accepted Answer

A)  long-term expense report 
B)  profit and loss statement 
C)  balance sheet 
D)  cash flow statement 
E)  short-term expense report 
A)  long-term expense report 
B)  profit and loss statement 
C)  balance sheet 
D)  cash flow statement 
E)  short-term expense report

Question 20

Which of the following is generated through management accounting rather than financial accounting?

Accepted Answer

A)  profit and loss statement 
B)  cash flow statement 
C)  balance sheet 
D)  profitability reports 
E)  statement of retained earnings 
A)  profit and loss statement 
B)  cash flow statement 
C)  balance sheet 
D)  profitability reports 
E)  statement of retained earnings

Working capital refers to the amount of cash an organization has in hand.

Total liabilities divided by total assets will yield the ________ ratio.

________ is an accounting method in which revenue is recorded when a sale is made and expense is recorded when it is incurred.

Which of the following is a key difference between financial accounting and management accounting?

Robex Woodworks is a furniture manufacturer.The company has purchased timber worth $5,000 from one of its suppliers and has not paid them yet.This amount is recorded as ________ in the balance sheet.

Assets - Liabilities = ________.

The ________ requires that expenses incurred in producing revenues be deducted from the revenue they generated during the same accounting period.

Compare and contrast public accountants and private accountants.

The profit earned or loss incurred by a firm,determined by subtracting expenses from revenues,is referred to as the ________.

Accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

Expenses incurred through marketing and distributing a product are referred to as ________ expenses.

Which of the following is a key difference between depreciation and amortization?

A company has the following assets: (1)Fixed assets worth $30,000 and (2)investments worth $6,000.The company's total liabilities amount to $25,000.What is the owner's equity of the company?

Jefferson Accounting is an independent accounting firm that provides auditing services for public companies.The firm thoroughly evaluates its clients' financial statements and certifies them.The firm is a(n)________.

Audit is a formal evaluation of the fairness and reliability of a client's financial statements.

Describe double-entry bookkeeping and the matching principle.

Which of the following is an example of an activity ratio?

You are planning to invest in a real estate firm.You want to analyze the firm's financial strengths in terms of the overall assets and liabilities.Which of the following reports is best suited to estimate this on a particular date?

Which of the following is generated through management accounting rather than financial accounting?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters

Exam 17: Financial Information and Accounting Concepts

Working capital refers to the amount of cash an organization has in hand.

Total liabilities divided by total assets will yield the ________ ratio.

________ is an accounting method in which revenue is recorded when a sale is made and expense is recorded when it is incurred.

Which of the following is a key difference between financial accounting and management accounting?

Robex Woodworks is a furniture manufacturer.The company has purchased timber worth $5,000 from one of its suppliers and has not paid them yet.This amount is recorded as ________ in the balance sheet.

Assets - Liabilities = ________.

The ________ requires that expenses incurred in producing revenues be deducted from the revenue they generated during the same accounting period.

Compare and contrast public accountants and private accountants.

The profit earned or loss incurred by a firm,determined by subtracting expenses from revenues,is referred to as the ________.

Accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

Expenses incurred through marketing and distributing a product are referred to as ________ expenses.

Which of the following is a key difference between depreciation and amortization?

A company has the following assets: (1)Fixed assets worth $30,000 and (2)investments worth $6,000.The company's total liabilities amount to $25,000.What is the owner's equity of the company?

Jefferson Accounting is an independent accounting firm that provides auditing services for public companies.The firm thoroughly evaluates its clients' financial statements and certifies them.The firm is a(n)________.

Audit is a formal evaluation of the fairness and reliability of a client's financial statements.

Describe double-entry bookkeeping and the matching principle.

Which of the following is an example of an activity ratio?

You are planning to invest in a real estate firm.You want to analyze the firm's financial strengths in terms of the overall assets and liabilities.Which of the following reports is best suited to estimate this on a particular date?

Which of the following is generated through management accounting rather than financial accounting?

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters