Question 1

is the systematic write-off of the value of a tangible asset over its useful life.

Accepted Answer

A) Expense structuring 
B) Depreciation 
C) Capital budgeting 
D) Gross margin allocation 
A) Expense structuring 
B) Depreciation 
C) Capital budgeting 
D) Gross margin allocation

Question 2

refers to how quickly an asset can be converted into cash.

Accepted Answer

A) Liquidity 
B) Velocity 
C) Fundability 
D) Accessibility 
A) Liquidity 
B) Velocity 
C) Fundability 
D) Accessibility

Question 3

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

Accepted Answer

A) True 
 B)False

Question 4

Debts owed by a business are called .

Accepted Answer

A) revenues 
B) liabilities 
C) equities 
D) assets 
A) revenues 
B) liabilities 
C) equities 
D) assets

Question 5

Bark Three Times Pet Store recently hired an accountant to make sense of each day's transactions, and keep better financial records for the business. The accountant showed the owner that the ledger in a computerized accounting system would automatically take entries and post them to the correct accounts in the ledger, making the bookkeeping tasks much easier.

Accepted Answer

A) True 
 B)False

Question 6

In businesses that handle a lot of perishable items (such as supermarkets) the actual movement of goods through inventory most closely resembles the LIFO inventory valuation technique.

Accepted Answer

A) True 
 B)False

Question 7

The shows how the capital is structured in the business, including the value of assets and the amount the firm owes at a specific point in time.

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of cash flows 
D) trial balance 
A) income statement 
B) balance sheet 
C) statement of cash flows 
D) trial balance

Question 8

You have just calculated the acid-test ratio for Peak Performance Sporting Goods [acid test ratio = 1.0]. As a loan officer for the local bank, you are called into your boss's office to interpret the results of this ratio. Which of the following statements best reflects an understanding of these results?

Accepted Answer

A) A company with an acid-test ratio = 1.0 demonstrates the ability to operate very conservatively. The bank should anticipate that this firm will always be able to meet its short-term liabilities. 
B) This company is already having problems meeting its short-term liabilities. 
C) An acid-test ratio = 1.0 means that this firm has $1.00 in current assets for every $2.00 in current liabilities. Peak Performance is a well- run operation, as long as it can continue to sell-off its inventory. 
D) An acid test ratio = 1.0 tells us that without adequate inventory turnover, this company may represent a higher risk. Peak Performance's acid test ratio shows that the firm maintains $1.00 in current assets for every $1.00 in current liabilities. 
A) A company with an acid-test ratio = 1.0 demonstrates the ability to operate very conservatively. The bank should anticipate that this firm will always be able to meet its short-term liabilities. 
B) This company is already having problems meeting its short-term liabilities. 
C) An acid-test ratio = 1.0 means that this firm has $1.00 in current assets for every $2.00 in current liabilities. Peak Performance is a well- run operation, as long as it can continue to sell-off its inventory. 
D) An acid test ratio = 1.0 tells us that without adequate inventory turnover, this company may represent a higher risk. Peak Performance's acid test ratio shows that the firm maintains $1.00 in current assets for every $1.00 in current liabilities.

Question 9

A major part of a bookkeeper's job is to interpret financial data and suggest strategies for improving the firm.

Accepted Answer

A) True 
 B)False

Question 10

Becky Hunter is an accountant employed by FAF Enterprises. Recently she has spent much of her time working on defining measures of costs for the production department and checking to ensure that various departments are staying within their budgets. Becky is a:

Accepted Answer

A) Public accountant whose work is mainly concerned with auditing. 
B) Public accountant whose work is mainly concerned with financial accounting. 
C) Private accountant whose work is mainly concerned with managerial accounting. 
D) Private accountant whose work is mainly concerned with financial accounting. 
A) Public accountant whose work is mainly concerned with auditing. 
B) Public accountant whose work is mainly concerned with financial accounting. 
C) Private accountant whose work is mainly concerned with managerial accounting. 
D) Private accountant whose work is mainly concerned with financial accounting.

Question 11

The LIFO method of inventory valuation bases the cost of goods sold on the cost of:

Accepted Answer

A) Merchandise that has been held in inventory for the longest period of time. 
B) Most recent merchandise purchased by the firm. 
C) Actual units customers purchased. 
D) Merchandise the firm acquired at the lowest cost. 
A) Merchandise that has been held in inventory for the longest period of time. 
B) Most recent merchandise purchased by the firm. 
C) Actual units customers purchased. 
D) Merchandise the firm acquired at the lowest cost.

Question 12

Taylor Casual, a chain of retail clothing stores, wants to assure investors and other outsiders that its financial statements are accurate. One way to do so would be to hire a public accounting firm to:

Accepted Answer

A) Produce an internal audit. 
B) Take over all of its accounting functions. 
C) Provide a "generally accepted practices" endorsement. 
D) Perform an independent audit. 
A) Produce an internal audit. 
B) Take over all of its accounting functions. 
C) Provide a "generally accepted practices" endorsement. 
D) Perform an independent audit.

Question 13

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31, 2009:   The year end cash balance for this firm is:

Accepted Answer

A) $7,000.00 
B) $53,000.00 
C) $23,000.00 
D) $30,000.00 
A) $7,000.00 
B) $53,000.00 
C) $23,000.00 
D) $30,000.00

Question 14

The sets accounting standards used in government accounting.

Accepted Answer

A) Federal Accounting Review Board 
B) Governmental Accounting Standards Board 
C) Academy of Public Sector Accountants 
D) Federal Reserve Board 
A) Federal Accounting Review Board 
B) Governmental Accounting Standards Board 
C) Academy of Public Sector Accountants 
D) Federal Reserve Board

Question 15

Which of the following responses is the best and most comprehensive? "A company's accounting information is useful to ."

Accepted Answer

A) Managers within the firm, exclusively 
B) Marketing research firms for pricing insights 
C) Primarily the IRS and other government agencies that regulate the firm 
D) Managers, owners, creditors, employees, and the government 
A) Managers within the firm, exclusively 
B) Marketing research firms for pricing insights 
C) Primarily the IRS and other government agencies that regulate the firm 
D) Managers, owners, creditors, employees, and the government

Question 16

The current ratio is used to evaluate a firm's ability to pay its short-term debts.

Accepted Answer

A) True 
 B)False

Question 17

The higher the risk of a particular investment, the greater the expected rate of return required by investors.

Accepted Answer

A) True 
 B)False

Question 18

Accounting is not important for nonprofit organizations since financial data is not critical to their success.

Accepted Answer

A) True 
 B)False

Question 19

We would expect the inventory turnover ratio for a ski shop to be than the turnover for a convenience store.

Accepted Answer

A) higher 
B) more meaningful 
C) lower 
D) less helpful 
A) higher 
B) more meaningful 
C) lower 
D) less helpful

Question 20

Which of the following is an example of a financial transaction?

Accepted Answer

A) A firm purchases a fire insurance policy. 
B) An internal auditor discovers an error in a firm's inventory valuation. 
C) A potential customer accesses a firm's Web page. 
D) A manager reviews the financial statements prepared by an accountant. 
A) A firm purchases a fire insurance policy. 
B) An internal auditor discovers an error in a firm's inventory valuation. 
C) A potential customer accesses a firm's Web page. 
D) A manager reviews the financial statements prepared by an accountant.

is the systematic write-off of the value of a tangible asset over its useful life.

refers to how quickly an asset can be converted into cash.

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

Debts owed by a business are called .

In businesses that handle a lot of perishable items (such as supermarkets) the actual movement of goods through inventory most closely resembles the LIFO inventory valuation technique.

The shows how the capital is structured in the business, including the value of assets and the amount the firm owes at a specific point in time.

A major part of a bookkeeper's job is to interpret financial data and suggest strategies for improving the firm.

Becky Hunter is an accountant employed by FAF Enterprises. Recently she has spent much of her time working on defining measures of costs for the production department and checking to ensure that various departments are staying within their budgets. Becky is a:

The LIFO method of inventory valuation bases the cost of goods sold on the cost of:

Taylor Casual, a chain of retail clothing stores, wants to assure investors and other outsiders that its financial statements are accurate. One way to do so would be to hire a public accounting firm to:

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31, 2009: The year end cash balance for this firm is:

The sets accounting standards used in government accounting.

Which of the following responses is the best and most comprehensive? "A company's accounting information is useful to ."

The current ratio is used to evaluate a firm's ability to pay its short-term debts.

The higher the risk of a particular investment, the greater the expected rate of return required by investors.

Accounting is not important for nonprofit organizations since financial data is not critical to their success.

We would expect the inventory turnover ratio for a ski shop to be than the turnover for a convenience store.

Which of the following is an example of a financial transaction?

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

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Exam 17: Understanding Accounting and Financial Information

is the systematic write-off of the value of a tangible asset over its useful life.

refers to how quickly an asset can be converted into cash.

It is always better for a firm to have a high inventory turnover ratio than a low turnover ratio.

Debts owed by a business are called .

In businesses that handle a lot of perishable items (such as supermarkets) the actual movement of goods through inventory most closely resembles the LIFO inventory valuation technique.

The shows how the capital is structured in the business, including the value of assets and the amount the firm owes at a specific point in time.

A major part of a bookkeeper's job is to interpret financial data and suggest strategies for improving the firm.

Becky Hunter is an accountant employed by FAF Enterprises. Recently she has spent much of her time working on defining measures of costs for the production department and checking to ensure that various departments are staying within their budgets. Becky is a:

The LIFO method of inventory valuation bases the cost of goods sold on the cost of:

Taylor Casual, a chain of retail clothing stores, wants to assure investors and other outsiders that its financial statements are accurate. One way to do so would be to hire a public accounting firm to:

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31, 2009: The year end cash balance for this firm is:

The sets accounting standards used in government accounting.

Which of the following responses is the best and most comprehensive? "A company's accounting information is useful to ."

The current ratio is used to evaluate a firm's ability to pay its short-term debts.

The higher the risk of a particular investment, the greater the expected rate of return required by investors.

Accounting is not important for nonprofit organizations since financial data is not critical to their success.

We would expect the inventory turnover ratio for a ski shop to be than the turnover for a convenience store.

Which of the following is an example of a financial transaction?

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Filters