Exam 8: Accounting: Decision Making by the Numbers

Management accountants work for private citizens who are not part of a firm, whereas public accountants work internally for publicly traded companies.

Describe at least three users of a firm's accounting information.

The Securities and Exchange Commission (SEC) does not require publicly traded corporations to provide comparative financial statements.

Bernie calls his accountant to determine how much money his company owes to its supplier of raw materials. He should ask his accountant to provide him with the company's balance sheet.

_____ typically require accounting information of a firm to evaluate its ability to pay back its loans by analyzing the firm's financial statements.

_____ is the difference between a firm's revenue and its cost of goods sold.

Activity­based costing is a simple "one size fits all" method of allocating costs.

_____ provide reports and analysis to senior­level employees of a firm to assist them in making better informed business decisions.

Which of the following is an advantage of using bottom­up budgeting?

Paying a firm to assemble a computer in a warehouse is considered a direct cost.

_____ refer to the cash spent by a firm to carry out business activities and generate revenue.

_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period.

The _____ is a financial statement that reports the revenues, expenses, and net income that resulted from a firm's operations over an accounting period.

Landis has been contracted as an external auditor by the Crawley Company. In his audit, he finds certain minor issues in the firm's financial statements, but is of the view that the statements are nevertheless an accurate representation of the firm's financial status. Landis is most likely to issue a(n) _____ opinion.

Operating cash flows of a firm should be exactly equal to the revenues and expenses that the firm reports on its income statement.

Stockholders would most likely use accounting information provided by their firm to:

Which of the following is a difference between an independent auditor's unqualified opinion and an independent auditor's qualified opinion?​

In the top­down approach to budgeting, companies allow middle and supervisory managers to participate actively in the creation of a budget.