Question 1

Cash flow statements identify three sources of cash receipts and disbursements: Assets,liabilities and owners' equity.

Accepted Answer

A) True 
 B)False

Question 2

The basic earnings per share and the diluted earnings per share would have quite different values for a firm that relied heavily on preferred stock and convertible debt securities to acquire funds.

Accepted Answer

A) True 
 B)False

Question 3

It is impossible to run a company effectively without the ability to read and understand basic accounting reports and financial statements.

Accepted Answer

A) True 
 B)False

Question 4

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n)________ performed.

Accepted Answer

A)  internal audit 
B)  independent audit 
C)  unofficial audit 
D)  GAAP analysis 
A)  internal audit 
B)  independent audit 
C)  unofficial audit 
D)  GAAP analysis

Question 5

A firm's efficient use of its assets in running the business is key to maintaining sufficient cash flow.Ratios that accountants utilize to measure the efficient use of assets are called ____________ ratios.

Accepted Answer

A)  leverage 
B)  liquidity 
C)  activity 
D)  profitability 
A)  leverage 
B)  liquidity 
C)  activity 
D)  profitability

Question 6

Citizens and special interest groups often have interest in the information generated by government accounting.

Accepted Answer

A) True 
 B)False

Question 7

As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information: Peak Performance's debt to owners equity ratio (rounded to the nearest tenth of a percent)is:

Accepted Answer

A)  45.4%. 
B)  66.7%. 
C)  112.5%. 
D)  133.3%. 
A)  45.4%. 
B)  66.7%. 
C)  112.5%. 
D)  133.3%.

Question 8

As Hector was packing to return to State University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,a stereo system,and a DVD player.An accountant would list all of these as Hector's:

Accepted Answer

A)  assets. 
B)  liabilities. 
C)  owners' equity. 
D)  intangibles. 
A)  assets. 
B)  liabilities. 
C)  owners' equity. 
D)  intangibles.

Question 9

Brianna is a bookkeeper for Monograms,Limited.She takes the firm's transactions and records them in a record book or computer program referred to as:

Accepted Answer

A)  A credit account. 
B)  An asset database. 
C)  A journal. 
D)  A debit program. 
A)  A credit account. 
B)  An asset database. 
C)  A journal. 
D)  A debit program.

Question 10

An individual who provides accounting services to individuals and businesses on a fee basis is referred to as a private accountant.

Accepted Answer

A) True 
 B)False

Question 11

Once a trial balance has been prepared,the next step of the accounting cycle involves:

Accepted Answer

A)  Posting the information to the correct ledger accounts. 
B)  Completing a balance sheet and ratio analysis. 
C)  Preparing financial statements such as the balance sheet,income statement,and statement of cash flows. 
D)  Classifying the transactions into logical categories. 
A)  Posting the information to the correct ledger accounts. 
B)  Completing a balance sheet and ratio analysis. 
C)  Preparing financial statements such as the balance sheet,income statement,and statement of cash flows. 
D)  Classifying the transactions into logical categories.

Question 12

__________ is the accounting practice of recording each transaction in two places in the accounting journal.

Accepted Answer

A)  Double-entry bookkeeping 
B)  Trial balancing 
C)  Account matching 
D)  Entry duplication 
A)  Double-entry bookkeeping 
B)  Trial balancing 
C)  Account matching 
D)  Entry duplication

Question 13

Allison Robards is the owner of Backstreet Books,a small eclectic style bookstore in a bustling college town.Allison prides herself in selecting hard to find books and magazines that her clientele enjoy.Recently,Allison is experiencing a cash flow shortage,and she is concerned that she may be purchasing too many copies of each title.Having recently completed a business class,you suggest to Allison that she calculate the ______________ ratio for her store,and then compare it to other stores in her industry.

Accepted Answer

A)  current 
B)  debt to equity 
C)  return on equity 
D)  inventory turnover 
A)  current 
B)  debt to equity 
C)  return on equity 
D)  inventory turnover

Question 14

Similar to the example of FIFO and LIFO inventory accounting methods depicted in the Connecting with Small Business box titled,"LIFO or FIFO?" a college store purchased sweatshirts for the upcoming fall semester.Using the following data,where a total of 100 sweatshirts were purchased by the store and placed in inventory,select the correct statement from the following choices.

Accepted Answer

A)  FIFO would provide the least profit. 
B)  FIFO would provide the most profit. 
C)  LIFO or FIFO will produce the same amount of profit. 
D)  LIFO would provide the most profit. 
A)  FIFO would provide the least profit. 
B)  FIFO would provide the most profit. 
C)  LIFO or FIFO will produce the same amount of profit. 
D)  LIFO would provide the most profit.

Question 15

Money received from tickets sold for the Rolling Stones concert is recorded as net income on the concert promoter's income statement.

Accepted Answer

A) True 
 B)False

Question 16

The steps in the accounting cycle do not need to be followed in the order stated.Monthly financial statements can be prepared with a good amount of accuracy,prior to posting in the ledger or preparing the trail balance.

Accepted Answer

A) True 
 B)False

Question 17

________ is the monetary value that is received for goods sold,services rendered and money received from other sources.

Accepted Answer

A)  Revenue 
B)  Gross margin 
C)  Net income 
D)  Cost of goods sold 
A)  Revenue 
B)  Gross margin 
C)  Net income 
D)  Cost of goods sold

Question 18

A bookkeeper's first task is to record the firm's transactions in a journal.

Accepted Answer

A) True 
 B)False

Question 19

A basic difference between managerial accounting and financial accounting is that managerial accounting:

Accepted Answer

A)  adheres to rules set by the GASB,while financial accounting uses a different group of rules set by the FASB. 
B)  involves the preparation of the balance sheet and income statement while financial accounting involves the preparation of the statement of cash flows. 
C)  handles recording and classifying information about transactions that have no direct financial impact on the firm,while financial accounting handles the recording and classifying of information about transactions that do have a financial impact. 
D)  provides information primarily intended for managers and others inside the company,while financial accounting provides information primarily intended for people outside the organization. 
A)  adheres to rules set by the GASB,while financial accounting uses a different group of rules set by the FASB. 
B)  involves the preparation of the balance sheet and income statement while financial accounting involves the preparation of the statement of cash flows. 
C)  handles recording and classifying information about transactions that have no direct financial impact on the firm,while financial accounting handles the recording and classifying of information about transactions that do have a financial impact. 
D)  provides information primarily intended for managers and others inside the company,while financial accounting provides information primarily intended for people outside the organization.

Question 20

The use of computerized accounting systems _____________.

Accepted Answer

A)  makes it possible for most firms to operate without the expense of hiring or consulting with accountants 
B)  reduces the pressure on managers in making financial decisions 
C)  allows firms to generate financial information almost instantly and whenever the organization needs it 
D)  creates an environment in which accounting has become nothing more than glorified bookkeeping,as all accountants are required to do is enter data into the system and monitor the results the program generates 
A)  makes it possible for most firms to operate without the expense of hiring or consulting with accountants 
B)  reduces the pressure on managers in making financial decisions 
C)  allows firms to generate financial information almost instantly and whenever the organization needs it 
D)  creates an environment in which accounting has become nothing more than glorified bookkeeping,as all accountants are required to do is enter data into the system and monitor the results the program generates

Cash flow statements identify three sources of cash receipts and disbursements: Assets,liabilities and owners' equity.

The basic earnings per share and the diluted earnings per share would have quite different values for a firm that relied heavily on preferred stock and convertible debt securities to acquire funds.

It is impossible to run a company effectively without the ability to read and understand basic accounting reports and financial statements.

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n)________ performed.

A firm's efficient use of its assets in running the business is key to maintaining sufficient cash flow.Ratios that accountants utilize to measure the efficient use of assets are called ____________ ratios.

Citizens and special interest groups often have interest in the information generated by government accounting.

As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information: Peak Performance's debt to owners equity ratio (rounded to the nearest tenth of a percent)is:

As Hector was packing to return to State University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,a stereo system,and a DVD player.An accountant would list all of these as Hector's:

Brianna is a bookkeeper for Monograms,Limited.She takes the firm's transactions and records them in a record book or computer program referred to as:

An individual who provides accounting services to individuals and businesses on a fee basis is referred to as a private accountant.

Once a trial balance has been prepared,the next step of the accounting cycle involves:

__________ is the accounting practice of recording each transaction in two places in the accounting journal.

Money received from tickets sold for the Rolling Stones concert is recorded as net income on the concert promoter's income statement.

The steps in the accounting cycle do not need to be followed in the order stated.Monthly financial statements can be prepared with a good amount of accuracy,prior to posting in the ledger or preparing the trail balance.

________ is the monetary value that is received for goods sold,services rendered and money received from other sources.

A bookkeeper's first task is to record the firm's transactions in a journal.

A basic difference between managerial accounting and financial accounting is that managerial accounting:

The use of computerized accounting systems _____________.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

Filters

Exam 17: Understanding Accounting and Financial Information

Cash flow statements identify three sources of cash receipts and disbursements: Assets,liabilities and owners' equity.

The basic earnings per share and the diluted earnings per share would have quite different values for a firm that relied heavily on preferred stock and convertible debt securities to acquire funds.

It is impossible to run a company effectively without the ability to read and understand basic accounting reports and financial statements.

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n)________ performed.

A firm's efficient use of its assets in running the business is key to maintaining sufficient cash flow.Ratios that accountants utilize to measure the efficient use of assets are called ____________ ratios.

Citizens and special interest groups often have interest in the information generated by government accounting.

As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information: Peak Performance's debt to owners equity ratio (rounded to the nearest tenth of a percent)is:

As Hector was packing to return to State University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,a stereo system,and a DVD player.An accountant would list all of these as Hector's:

Brianna is a bookkeeper for Monograms,Limited.She takes the firm's transactions and records them in a record book or computer program referred to as:

An individual who provides accounting services to individuals and businesses on a fee basis is referred to as a private accountant.

Once a trial balance has been prepared,the next step of the accounting cycle involves:

__________ is the accounting practice of recording each transaction in two places in the accounting journal.

Money received from tickets sold for the Rolling Stones concert is recorded as net income on the concert promoter's income statement.

The steps in the accounting cycle do not need to be followed in the order stated.Monthly financial statements can be prepared with a good amount of accuracy,prior to posting in the ledger or preparing the trail balance.

________ is the monetary value that is received for goods sold,services rendered and money received from other sources.

A bookkeeper's first task is to record the firm's transactions in a journal.

A basic difference between managerial accounting and financial accounting is that managerial accounting:

The use of computerized accounting systems _____________.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

Filters