Exam 17: Understanding Accounting and Financial Information

Activities of managerial accountants include measuring and reporting the costs of production, marketing, and other functions within the organization.

Budget preparation is one aspect of managerial accounting.

Cash revenues from the sale of new cars at Five Star Autos would be listed as a cash inflow from operations on Five Star's statement of cash flows.

Sales receipts, purchase orders, and payroll records are all examples of accounting transactions that would be recorded by a(n)

The cost of goods sold reflects the selling price of the merchandise sold over a period of time.

In large companies, certified internal auditors are usually responsible for preparing tax returns and developing tax strategies for businesses.

The fact that Minnie wants to determine the "bottom line" for Double Entry Doors means that she is particularly interested in preparing her firm's

Tracy wants to start her own business, but knows little about how to set up an accounting system or interpret financial information. "I'm not worried about accounting," she tells her friends. "I'll just hire a part-time bookkeeper to handle all that type of stuff, and focus my attention on what I like-finding ways to satisfy my customers." Which of the following is the best response to Tracy's comments?

Barkatorium Pet Supplies' owner is concerned with how his business decisions affect the bottom line. This is another way of saying that he is concerned with the impact of his decisions on net income after taxes.

Earnings per share, return on sales, and return on equity are examples of

The balance sheet reflects the fact that assets equal the sum of liabilities and owners' equity.

Patents and copyrights are examples of intangible assets.

A statement of cash flows summarizes a company's cash receipts and cash payments over a period of time.

The inventory turnover ratio measures the speed of inventory moving through the firm and its conversion into sales.

Accounting is an easy subject for people to understand because almost everyone is exposed to basic accounting concepts in their everyday life.

Thoroughly describe each of six parts of the accounting cycle.

Liabilities are reported on the income statement.

Assets are listed on the balance sheet in order of liquidity, with the most liquid assets listed first.

George works in the accounting department at the Green Goddess Lawn Services, where it is his job to record all transactions into journals. After completing this task, the next step in the accounting process is to

Kimberly has been helping Jonah in preparing his personal income tax forms for a couple of years. Jonah's boss recommended Kimberly because she had done a good job setting up the company's new accounting system. Jonah is very satisfied with Kimberly's work and feels that the fees she charges are quite reasonable. Kimberly would be classified as a(n)