Question 1

The statement of financial position is also known as the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

Accepted Answer

Managerial accounting and financial acco

Question 3

In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

Accepted Answer

A) True 
 B)False

Question 4

After the Sarbanes-Oxley Act was signed by the president, auditors and accountants can be imprisoned for up to ____ years for destroying financial documents and willful violations of the securities laws.

Accepted Answer

A)  fifty 
B)  thirty 
C)  twenty 
D)  ten 
E)  five 
A)  fifty 
B)  thirty 
C)  twenty 
D)  ten 
E)  five

Question 5

Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.

Accepted Answer

A) True 
 B)False

Question 6

Getting the total of cash, marketable securities, and receivables and then dividing that total by the current liabilities results in the _____.

Accepted Answer

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

Question 7

Ebony Jones is hired by Ruby Tuesday to help with budgeting, determining the costs of the firm's meal services, and recording transactions and creating financial statements.Ebony is a _____.

Accepted Answer

A)  private accountant 
B)  budget manager 
C)  public accountant 
D)  clerk 
E)  public auditor 
A)  private accountant 
B)  budget manager 
C)  public accountant 
D)  clerk 
E)  public auditor

Question 8

The ease with which an asset can be converted into cash is referred to as its _____.

Accepted Answer

A)  liquidity 
B)  profitability 
C)  solvency 
D)  convertibility 
E)  capitalization capacity 
A)  liquidity 
B)  profitability 
C)  solvency 
D)  convertibility 
E)  capitalization capacity

Question 9

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

Accepted Answer

A) True 
 B)False

Question 10

Richard Samonski does not understand the significance of the accounting equation.You explain its importance in the simplest way by saying that:

Accepted Answer

A)  as a result of each transaction, the total assets should equal the total liabilities plus owners' equity. 
B)  as a result of most of the transactions, assets and liabilities are equal. 
C)  owners' equity is not as important as assets and liabilities. 
D)  it is just an exercise in accounting. 
E)  as a result of each transaction, total liabilities should equal total assets plus owners' equity. 
A)  as a result of each transaction, the total assets should equal the total liabilities plus owners' equity. 
B)  as a result of most of the transactions, assets and liabilities are equal. 
C)  owners' equity is not as important as assets and liabilities. 
D)  it is just an exercise in accounting. 
E)  as a result of each transaction, total liabilities should equal total assets plus owners' equity.

Question 11

The earnings statement is another term for the _____.

Accepted Answer

A)  balance sheet 
B)  income statement 
C)  statement of financial position 
D)  owners' equity statement 
E)  capital statement 
A)  balance sheet 
B)  income statement 
C)  statement of financial position 
D)  owners' equity statement 
E)  capital statement

Question 12

Which of the following is true about CPAs?

Accepted Answer

A)  Almost everyone who does accounting work is a CPA. 
B)  CPA standards are the same in every state. 
C)  CPAs must participate in continuing education programs. 
D)  Once an individual has become a CPA, no further work is necessary to retain the certification. 
E)  The portions of the CPA examination are costing, taxing, budgeting, and billing. 
A)  Almost everyone who does accounting work is a CPA. 
B)  CPA standards are the same in every state. 
C)  CPAs must participate in continuing education programs. 
D)  Once an individual has become a CPA, no further work is necessary to retain the certification. 
E)  The portions of the CPA examination are costing, taxing, budgeting, and billing.

Question 13

Often, the ones who are hurt when corporations cook the books are the firm's employees, investors, lenders, and suppliers.

Accepted Answer

A) True 
 B)False

Question 14

A person who wishes to practice accounting as a CPA must pass an exam prepared by the American Institute of Certified Public Accountants.

Accepted Answer

A) True 
 B)False

Question 15

The industry average for the earnings per share ratio is $2.25 per share.

Accepted Answer

A) True 
 B)False

Question 16

Regina owns and operates her own bakery and coffee shop.Regina has no accounting training and has only three employees.How does she most likely handle the necessary accounting for her business?

Accepted Answer

A)  She does it herself because it takes little training or knowledge. 
B)  She hires a private accountant to work for her and take care of the accounting functions. 
C)  She has one of her part-time chefs do the accounting when he has time. 
D)  She pays a public accountant to do the accounting for her business. 
E)  She does nothing at all, because accounting is not necessary for businesses. 
A)  She does it herself because it takes little training or knowledge. 
B)  She hires a private accountant to work for her and take care of the accounting functions. 
C)  She has one of her part-time chefs do the accounting when he has time. 
D)  She pays a public accountant to do the accounting for her business. 
E)  She does nothing at all, because accounting is not necessary for businesses.

Question 17

Why would managers, lenders, and investors compare current financial statements with those prepared for past accounting periods?

Accepted Answer

Managers, lenders, and investors often c

Question 18

If a company has $50,000 of assets, which of the following could be true?

Accepted Answer

A)  It has -$50,000 in stockholders' equity and $100,000 in liabilities. 
B)  The company has fewer assets than it does liabilities. 
C)  It has $30,000 in liabilities and $80,000 in owners' equity. 
D)  The company has more owners' equity than assets. 
E)  It has $23,000 in owners' equity and $27,000 in liabilities. 
A)  It has -$50,000 in stockholders' equity and $100,000 in liabilities. 
B)  The company has fewer assets than it does liabilities. 
C)  It has $30,000 in liabilities and $80,000 in owners' equity. 
D)  The company has more owners' equity than assets. 
E)  It has $23,000 in owners' equity and $27,000 in liabilities.

Question 19

The purpose of an audit is to ensure that financial statements have been prepared according to

Accepted Answer

A)  the particular company's standards. 
B)  the industry's standards. 
C)  generally accepted accounting principles. 
D)  international accounting standards. 
E)  the standards of certified public accountants. 
A)  the particular company's standards. 
B)  the industry's standards. 
C)  generally accepted accounting principles. 
D)  international accounting standards. 
E)  the standards of certified public accountants.

Question 20

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA.The bank is requiring Nathan to have his financial statements _____.

Accepted Answer

A)  verified 
B)  audited 
C)  affirmed 
D)  certified 
E)  insured 
A)  verified 
B)  audited 
C)  affirmed 
D)  certified 
E)  insured

The statement of financial position is also known as the balance sheet.

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

After the Sarbanes-Oxley Act was signed by the president, auditors and accountants can be imprisoned for up to ____ years for destroying financial documents and willful violations of the securities laws.

Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.

Getting the total of cash, marketable securities, and receivables and then dividing that total by the current liabilities results in the _____.

Ebony Jones is hired by Ruby Tuesday to help with budgeting, determining the costs of the firm's meal services, and recording transactions and creating financial statements.Ebony is a _____.

The ease with which an asset can be converted into cash is referred to as its _____.

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

Richard Samonski does not understand the significance of the accounting equation.You explain its importance in the simplest way by saying that:

The earnings statement is another term for the _____.

Which of the following is true about CPAs?

Often, the ones who are hurt when corporations cook the books are the firm's employees, investors, lenders, and suppliers.

A person who wishes to practice accounting as a CPA must pass an exam prepared by the American Institute of Certified Public Accountants.

The industry average for the earnings per share ratio is $2.25 per share.

Regina owns and operates her own bakery and coffee shop.Regina has no accounting training and has only three employees.How does she most likely handle the necessary accounting for her business?

Why would managers, lenders, and investors compare current financial statements with those prepared for past accounting periods?

If a company has $50,000 of assets, which of the following could be true?

The purpose of an audit is to ensure that financial statements have been prepared according to

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA.The bank is requiring Nathan to have his financial statements _____.

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Information and E-Business

Mastering Financial Management

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Exam 15: Using Accounting Information

The statement of financial position is also known as the balance sheet.

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

After the Sarbanes-Oxley Act was signed by the president, auditors and accountants can be imprisoned for up to ____ years for destroying financial documents and willful violations of the securities laws.

Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.

Getting the total of cash, marketable securities, and receivables and then dividing that total by the current liabilities results in the _____.

Ebony Jones is hired by Ruby Tuesday to help with budgeting, determining the costs of the firm's meal services, and recording transactions and creating financial statements.Ebony is a _____.

The ease with which an asset can be converted into cash is referred to as its _____.

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

Richard Samonski does not understand the significance of the accounting equation.You explain its importance in the simplest way by saying that:

The earnings statement is another term for the _____.

Which of the following is true about CPAs?

Often, the ones who are hurt when corporations cook the books are the firm's employees, investors, lenders, and suppliers.

A person who wishes to practice accounting as a CPA must pass an exam prepared by the American Institute of Certified Public Accountants.

The industry average for the earnings per share ratio is $2.25 per share.

Regina owns and operates her own bakery and coffee shop.Regina has no accounting training and has only three employees.How does she most likely handle the necessary accounting for her business?

Why would managers, lenders, and investors compare current financial statements with those prepared for past accounting periods?

If a company has $50,000 of assets, which of the following could be true?

The purpose of an audit is to ensure that financial statements have been prepared according to

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA.The bank is requiring Nathan to have his financial statements _____.

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Information and E-Business

Mastering Financial Management

Filters