Question 1

As buildings and equipment wear out or become obsolete,their value decreases.To reflect decreasing value,accountants use ________.

Accepted Answer

A)  prepaid expenses 
B)  subtracting methods 
C)  depreciation 
D)  licensing 
A)  prepaid expenses 
B)  subtracting methods 
C)  depreciation 
D)  licensing C

Question 2

The CPA Vision Project has identified "crunching numbers" as the core competency for accountants.

Accepted Answer

A) True 
 B)False  False

Question 3

Short Case Scenario 14-1
Mary Ann has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business that is up for sale. The current owners claim that the business is highly profitable, but Mary Ann has her doubts. She wonders why the owners would be so interested in selling the business if it is such a money maker. Furthermore, the price that they are asking seems high to Mary Ann. Without any formal training in accounting, Mary Ann asks a friend, Rolanda, for advice.
-The auditor's report has come back and Mary Ann is reviewing the financial statements.What information will Mary Ann find on the balance sheet?

Accepted Answer

The balance sheet is the financial statement that details a firm's assets,liabilities,and owners' equity.

Question 4

What are the two categories of owners' equity?

Accepted Answer

A)  short-term and long-term 
B)  stocks and bonds 
C)  paid-in capital and retained earnings 
D)  common stock and preferred stock 
A)  short-term and long-term 
B)  stocks and bonds 
C)  paid-in capital and retained earnings 
D)  common stock and preferred stock

Question 5

When hired as consultants,accounting firms provide ________ services ranging from personal financial planning to planning corporate mergers.

Accepted Answer

A)  regulatory 
B)  private accounting 
C)  auditing 
D)  management advisory 
A)  regulatory 
B)  private accounting 
C)  auditing 
D)  management advisory

Question 6

________ are net profits kept by a firm rather than paid out as dividends to stockholders.

Accepted Answer

A)  Liquid assets 
B)  Debts 
C)  Depreciation modes 
D)  Retained earnings 
A)  Liquid assets 
B)  Debts 
C)  Depreciation modes 
D)  Retained earnings

Question 7

The purpose of ethics in accounting is to maintain public confidence in business institutions,financial markets,and the products and services of the accounting profession.

Accepted Answer

A) True 
 B)False

Question 8

With fixed assets of $6.1 billion and current assets of $2.69 billion,Calder Enterprises also has long-term liabilities of $1.7 billion and current liabilities of $0.34 billion.What is the firm's current ratio?

Accepted Answer

A)  7.9 
B)  2.27 
C)  5 
D)  none of the above 
A)  7.9 
B)  2.27 
C)  5 
D)  none of the above

Question 9

________ are current liabilities consisting of bills owed to suppliers,plus wages and taxes due within the upcoming year.

Accepted Answer

A)  Accounts receivable 
B)  Accounts payable 
C)  Prepaid expenses 
D)  Marketable securities 
A)  Accounts receivable 
B)  Accounts payable 
C)  Prepaid expenses 
D)  Marketable securities

Question 10

Explain the role of accountants and distinguish between the kinds of work done by public accountants,private accountants,management accountants,and forensic accountants.

Accepted Answer

The role of accountants is to maintain a

Question 11

Short Case Scenario 14-1
Mary Ann has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business that is up for sale. The current owners claim that the business is highly profitable, but Mary Ann has her doubts. She wonders why the owners would be so interested in selling the business if it is such a money maker. Furthermore, the price that they are asking seems high to Mary Ann. Without any formal training in accounting, Mary Ann asks a friend, Rolanda, for advice.
-The auditor has expressed concerns about the company's ability to pay its bills as they are due.What type of financial ratio might provide insight into this concern?

Accepted Answer

The auditor has probably evaluated the f

Question 12

An asset is ________.

Accepted Answer

A)  the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities 
B)  a debt owed by a firm to an outside organization or individual 
C)  any economic resource expected to benefit a firm or an individual who owns it 
D)  the amount of money originally invested in a business by its owners 
A)  the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities 
B)  a debt owed by a firm to an outside organization or individual 
C)  any economic resource expected to benefit a firm or an individual who owns it 
D)  the amount of money originally invested in a business by its owners

Question 13

________ is the field of accounting that serves internal users of a company's financial information.

Accepted Answer

A)  Managerial accounting 
B)  Government accounting 
C)  Financial accounting 
D)  Stock market accounting 
A)  Managerial accounting 
B)  Government accounting 
C)  Financial accounting 
D)  Stock market accounting

Question 14

The formula for the ________ is current assets divided by current liabilities.

Accepted Answer

A)  acid test ratio 
B)  current ratio 
C)  profit margin 
D)  return on equity 
A)  acid test ratio 
B)  current ratio 
C)  profit margin 
D)  return on equity

Question 15

________ expenses,such as management salaries and maintenance costs,are related to the general management of the company.

Accepted Answer

A)  Gross 
B)  Revenue 
C)  Sales and marketing 
D)  Administrative and general 
A)  Gross 
B)  Revenue 
C)  Sales and marketing 
D)  Administrative and general

Question 16

Which of the following corporations have been known to have violated accounting ethics?

Accepted Answer

A)  WorldCom 
B)  Coca-Cola 
C)  Microsoft 
D)  all of the above 
A)  WorldCom 
B)  Coca-Cola 
C)  Microsoft 
D)  all of the above

Question 17

A satisfactory current ratio indicates that a firm is a good short-run credit risk.

Accepted Answer

A) True 
 B)False

Question 18

If a company's assets exceed its liabilities,owners' equity is negative.

Accepted Answer

A) True 
 B)False

Question 19

Cash transactions involved in buying and selling goods and services would be classified as cash flows from ________ on the statement of cash flows.

Accepted Answer

A)  operations 
B)  budgeting 
C)  investing 
D)  planning 
A)  operations 
B)  budgeting 
C)  investing 
D)  planning

Question 20

Owners' equity consists of two sources: (a)the amount that the owners originally invested and (b)profits earned by and reinvested in the company.

Accepted Answer

A) True 
 B)False

As buildings and equipment wear out or become obsolete,their value decreases.To reflect decreasing value,accountants use ________.

The CPA Vision Project has identified "crunching numbers" as the core competency for accountants.

What are the two categories of owners' equity?

When hired as consultants,accounting firms provide ________ services ranging from personal financial planning to planning corporate mergers.

________ are net profits kept by a firm rather than paid out as dividends to stockholders.

The purpose of ethics in accounting is to maintain public confidence in business institutions,financial markets,and the products and services of the accounting profession.

With fixed assets of $6.1 billion and current assets of $2.69 billion,Calder Enterprises also has long-term liabilities of $1.7 billion and current liabilities of $0.34 billion.What is the firm's current ratio?

________ are current liabilities consisting of bills owed to suppliers,plus wages and taxes due within the upcoming year.

Explain the role of accountants and distinguish between the kinds of work done by public accountants,private accountants,management accountants,and forensic accountants.

An asset is ________.

________ is the field of accounting that serves internal users of a company's financial information.

The formula for the ________ is current assets divided by current liabilities.

________ expenses,such as management salaries and maintenance costs,are related to the general management of the company.

Which of the following corporations have been known to have violated accounting ethics?

A satisfactory current ratio indicates that a firm is a good short-run credit risk.

If a company's assets exceed its liabilities,owners' equity is negative.

Cash transactions involved in buying and selling goods and services would be classified as cash flows from ________ on the statement of cash flows.

Owners' equity consists of two sources: (a)the amount that the owners originally invested and (b)profits earned by and reinvested in the company.

The U.S.Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Pricing, Distributing, and Promoting Products

Money and Banking

Managing Finances

Filters

Exam 14: The Role of Accountants and Accounting Information

As buildings and equipment wear out or become obsolete,their value decreases.To reflect decreasing value,accountants use ________.

The CPA Vision Project has identified "crunching numbers" as the core competency for accountants.

What are the two categories of owners' equity?

When hired as consultants,accounting firms provide ________ services ranging from personal financial planning to planning corporate mergers.

________ are net profits kept by a firm rather than paid out as dividends to stockholders.

The purpose of ethics in accounting is to maintain public confidence in business institutions,financial markets,and the products and services of the accounting profession.

With fixed assets of $6.1 billion and current assets of $2.69 billion,Calder Enterprises also has long-term liabilities of $1.7 billion and current liabilities of $0.34 billion.What is the firm's current ratio?

________ are current liabilities consisting of bills owed to suppliers,plus wages and taxes due within the upcoming year.

Explain the role of accountants and distinguish between the kinds of work done by public accountants,private accountants,management accountants,and forensic accountants.

An asset is ________.

________ is the field of accounting that serves internal users of a company's financial information.

The formula for the ________ is current assets divided by current liabilities.

________ expenses,such as management salaries and maintenance costs,are related to the general management of the company.

Which of the following corporations have been known to have violated accounting ethics?

A satisfactory current ratio indicates that a firm is a good short-run credit risk.

If a company's assets exceed its liabilities,owners' equity is negative.

Cash transactions involved in buying and selling goods and services would be classified as cash flows from ________ on the statement of cash flows.

Owners' equity consists of two sources: (a)the amount that the owners originally invested and (b)profits earned by and reinvested in the company.

The U.S.Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Pricing, Distributing, and Promoting Products

Money and Banking

Managing Finances

Filters