Question 1

If a firm's assets equal $6,000 and its liabilities equal $3,500, then owners' equity is _____.

Accepted Answer

A)  $9,500 
B)  $4,750 
C)  $2,500 
D)  ­$2,500 
A)  $9,500 
B)  $4,750 
C)  $2,500 
D)  ­$2,500

Question 2

The change in retained earnings of a firm is found by subtracting _____ from the net income.

Accepted Answer

A)  dividends paid to shareholders 
B)  stockholders' equity 
C)  cost of goods sold 
D)  cash payments to purchase securities 
A)  dividends paid to shareholders 
B)  stockholders' equity 
C)  cost of goods sold 
D)  cash payments to purchase securities

Question 3

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

Accepted Answer

A)  Financial accounting is designed to meet the needs of company managers, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm. 
B)  Financial accounting provides accounting information exclusively to government agencies, whereas managerial accounting is designed to specially meet the needs of suppliers and creditors. 
C)  Financial accounting provides stockholders with information about the overall financial performance of a firm, whereas managerial accounting is designed to meet the needs of company managers. 
D)  Financial accounting provides company accounting information for public consumption, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm. 
A)  Financial accounting is designed to meet the needs of company managers, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm. 
B)  Financial accounting provides accounting information exclusively to government agencies, whereas managerial accounting is designed to specially meet the needs of suppliers and creditors. 
C)  Financial accounting provides stockholders with information about the overall financial performance of a firm, whereas managerial accounting is designed to meet the needs of company managers. 
D)  Financial accounting provides company accounting information for public consumption, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm.

Question 4

Public accountants ensure that the government's expenditures are maintained in compliance with regulations.

Accepted Answer

A) True 
 B)False

Question 5

The budgeted balance sheet indicates how a firm's operations, investing, and financing activities affect its assets, liabilities, and owners' equity accounts.

Accepted Answer

A) True 
 B)False

Question 6

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is the rationale for the accounting equation?

Accepted Answer

A)  The value of the firm's assets must equal the total amount of financing used to purchase assets. 
B)  A firm's financial worth is calculated by subtracting the assets from shareholder equity. 
C)  The firm can calculate its profit margin by subtracting expenses and liabilities from revenue. 
D)  The value of a firm's assets must always be greater than the total amount of financing to purchase those assets. 
A)  The value of the firm's assets must equal the total amount of financing used to purchase assets. 
B)  A firm's financial worth is calculated by subtracting the assets from shareholder equity. 
C)  The firm can calculate its profit margin by subtracting expenses and liabilities from revenue. 
D)  The value of a firm's assets must always be greater than the total amount of financing to purchase those assets.

Question 8

What are the major financial statements? Discuss them in brief.

Accepted Answer

The major financial statements are the b

Question 9

The Food and Drug Administration (FDA) has submitted its accounting information to Tamara, who works for the SEC. She will make sure that its reports are filed as per the Securities and Exchange Commission reporting requirements. In this case, Tamara works for _____.

Accepted Answer

A)  a cybermediary 
B)  the government 
C)  a creditor 
D)  a stockholder 
A)  a cybermediary 
B)  the government 
C)  a creditor 
D)  a stockholder

Question 10

Accounts payable are listed under assets on a balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

_____ are costs that are incurred as the result of some specific cost object.

Accepted Answer

A)  Direct costs 
B)  Implicit costs 
C)  Indirect costs 
D)  Fixed costs 
A)  Direct costs 
B)  Implicit costs 
C)  Indirect costs 
D)  Fixed costs

Question 12

When an external auditor doesn't uncover any problems with a firm's financial methods and statements, he or she will issue an unqualified opinion.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would be listed in the owners' equity section of a balance sheet?

Accepted Answer

A)  Revenue 
B)  Expenses 
C)  Net income 
D)  Retained earnings 
A)  Revenue 
B)  Expenses 
C)  Net income 
D)  Retained earnings

Question 14

Managerial accounting involves preparing financial statements for use by external stakeholders such as owners, creditors, and suppliers.

Accepted Answer

A) True 
 B)False

Question 15

Describe the role of the Financial Accounting Standards Board (FASB).

Accepted Answer

The Financial Accounting Standards Board

Question 16

Horizontal analysis involves analyzing information in financial statements by expressing various accounts as percentages of a base amount.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true of the FASB?

Accepted Answer

A)  Its authority comes from the Internal Revenue Service. 
B)  It consists of seven members appointed by the Financial Accounting Foundation. 
C)  Its members cannot be reappointed to serve additional terms. 
D)  Its members can retain ties with firms in which they were previously employed. 
A)  Its authority comes from the Internal Revenue Service. 
B)  It consists of seven members appointed by the Financial Accounting Foundation. 
C)  Its members cannot be reappointed to serve additional terms. 
D)  Its members can retain ties with firms in which they were previously employed.

Question 18

Information from the cash budget, the capital expenditure budget, and the budgeted income statement are combined to form the budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Salaries and commissions to salespeople and advertising expenses are _____.

Accepted Answer

A)  selling expenses 
B)  general expenses 
C)  administrative expenses 
D)  mediated expenses 
A)  selling expenses 
B)  general expenses 
C)  administrative expenses 
D)  mediated expenses

Question 20

Management accountants work within a business organization, preparing reports and analyzing financial information for the company that employs them.

Accepted Answer

A) True 
 B)False

If a firm's assets equal $6,000 and its liabilities equal $3,500, then owners' equity is _____.

The change in retained earnings of a firm is found by subtracting _____ from the net income.

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

Public accountants ensure that the government's expenditures are maintained in compliance with regulations.

The budgeted balance sheet indicates how a firm's operations, investing, and financing activities affect its assets, liabilities, and owners' equity accounts.

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Which of the following statements is the rationale for the accounting equation?

What are the major financial statements? Discuss them in brief.

The Food and Drug Administration (FDA) has submitted its accounting information to Tamara, who works for the SEC. She will make sure that its reports are filed as per the Securities and Exchange Commission reporting requirements. In this case, Tamara works for _____.

Accounts payable are listed under assets on a balance sheet.

_____ are costs that are incurred as the result of some specific cost object.

When an external auditor doesn't uncover any problems with a firm's financial methods and statements, he or she will issue an unqualified opinion.

Which of the following would be listed in the owners' equity section of a balance sheet?

Managerial accounting involves preparing financial statements for use by external stakeholders such as owners, creditors, and suppliers.

Describe the role of the Financial Accounting Standards Board (FASB).

Horizontal analysis involves analyzing information in financial statements by expressing various accounts as percentages of a base amount.

Which of the following statements is true of the FASB?

Information from the cash budget, the capital expenditure budget, and the budgeted income statement are combined to form the budgeted balance sheet.

Salaries and commissions to salespeople and advertising expenses are _____.

Management accountants work within a business organization, preparing reports and analyzing financial information for the company that employs them.

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Appendix Studentinstructor Review Cards

Online Appendix

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Exam 8: Accounting: Decision Making by the Numbers

If a firm's assets equal $6,000 and its liabilities equal $3,500, then owners' equity is _____.

The change in retained earnings of a firm is found by subtracting _____ from the net income.

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

Public accountants ensure that the government's expenditures are maintained in compliance with regulations.

The budgeted balance sheet indicates how a firm's operations, investing, and financing activities affect its assets, liabilities, and owners' equity accounts.

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Which of the following statements is the rationale for the accounting equation?

What are the major financial statements? Discuss them in brief.

The Food and Drug Administration (FDA) has submitted its accounting information to Tamara, who works for the SEC. She will make sure that its reports are filed as per the Securities and Exchange Commission reporting requirements. In this case, Tamara works for _____.

Accounts payable are listed under assets on a balance sheet.

_____ are costs that are incurred as the result of some specific cost object.

When an external auditor doesn't uncover any problems with a firm's financial methods and statements, he or she will issue an unqualified opinion.

Which of the following would be listed in the owners' equity section of a balance sheet?

Managerial accounting involves preparing financial statements for use by external stakeholders such as owners, creditors, and suppliers.

Describe the role of the Financial Accounting Standards Board (FASB).

Horizontal analysis involves analyzing information in financial statements by expressing various accounts as percentages of a base amount.

Which of the following statements is true of the FASB?

Information from the cash budget, the capital expenditure budget, and the budgeted income statement are combined to form the budgeted balance sheet.

Salaries and commissions to salespeople and advertising expenses are _____.

Management accountants work within a business organization, preparing reports and analyzing financial information for the company that employs them.

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Appendix Studentinstructor Review Cards

Online Appendix

Filters