Question 1

A bookkeeper's first task is to:

Accepted Answer

A)  Separate all of the firm's transactions into meaningful categories. 
B)  Prepare the firm's financial statements. 
C)  Summarize the firm's financial data. 
D)  Interpret and report data to the firm's management. 
A)  Separate all of the firm's transactions into meaningful categories. 
B)  Prepare the firm's financial statements. 
C)  Summarize the firm's financial data. 
D)  Interpret and report data to the firm's management.

Question 2

A firm's ________ reports the profit or loss for the firm over a specified time period.

Accepted Answer

A)  income statement 
B)  balance sheet 
C)  statement of cash flows 
D)  bank statement 
A)  income statement 
B)  balance sheet 
C)  statement of cash flows 
D)  bank statement

Question 3

Phil O'Keefe is opening a small sports store in his town.At the advice of a friend who is a bookkeeper,he keeps the receipts of everything he purchases for the business in the bottom drawer of his desk,along with all other business expenses,such as his retail license,his rent expense,and insurance expense.You suggest that _______.

Accepted Answer

A)  Phil continues with this procedure,but only until the store opens,at which time he will need an additional drawer for his sales transactions 
B)  Phil invests some time in exploring an accounting system that will make it easier to classify and summarize accounting information 
C)  Phil continues with this procedure because there is very little difference between one expense and another 
D)  Phil stops wasting valuable time saving the receipts because accountants only record sales transactions 
A)  Phil continues with this procedure,but only until the store opens,at which time he will need an additional drawer for his sales transactions 
B)  Phil invests some time in exploring an accounting system that will make it easier to classify and summarize accounting information 
C)  Phil continues with this procedure because there is very little difference between one expense and another 
D)  Phil stops wasting valuable time saving the receipts because accountants only record sales transactions

Question 4

Oklahoma Chemicals plans to use its computers to post information from journals to the ledger instantaneously.One obvious benefit of this technology is:

Accepted Answer

A)  A reduction in the number of accountants required by the firm. 
B)  Less scrutiny from agencies such as the Internal Revenue Service. 
C)  To shift financial decision making from people to programmed technology. 
D)  Readily available financial information. 
A)  A reduction in the number of accountants required by the firm. 
B)  Less scrutiny from agencies such as the Internal Revenue Service. 
C)  To shift financial decision making from people to programmed technology. 
D)  Readily available financial information.

Question 5

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31,2010: The year end cash balance for this firm is:

Accepted Answer

A)  $7,000.00 
B)  $53,000.00 
C)  $23,000.00 
D)  $30,000.00 
A)  $7,000.00 
B)  $53,000.00 
C)  $23,000.00 
D)  $30,000.00

Question 6

The Barkley Company balance sheet shows the following items: Accounts payable totaling $50,000;salaries payable totaling $65,000,and notes payable totaling $100,000.These are liabilities,or money that the firm owes others.

Accepted Answer

A) True 
 B)False

Question 7

A _________ summarizes all the data from the account ledgers to verify that they are correct and balanced.

Accepted Answer

A)  ledger statement 
B)  balance sheet 
C)  trial balance 
D)  statement of cash flows 
A)  ledger statement 
B)  balance sheet 
C)  trial balance 
D)  statement of cash flows

Question 8

Because each business is unique,the accounting profession recognizes that the accounting principles followed by one company may need to be completely different from the accounting principles followed by another firm.

Accepted Answer

A) True 
 B)False

Question 9

Peak Performance Sporting Goods Company continues to perform well in spite of an economic recession.Company executives credit this to the strong partnerships it enjoys with category killer and large discount chains.Last week Peak Performance reported basic EPS [earnings per share] = $.80/share.If the firm has 4,000,000 shares outstanding,net income after taxes for the same period = _____.

Accepted Answer

A)  $80,000 
B)  $5,000,000 
C)  $3,200,000 
D)  $32,000 
A)  $80,000 
B)  $5,000,000 
C)  $3,200,000 
D)  $32,000

Question 10

A(n)___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

Accepted Answer

A)  internal audit 
B)  annual report 
C)  independent audit 
D)  certified audit 
A)  internal audit 
B)  annual report 
C)  independent audit 
D)  certified audit

Question 11

Olivia is a public accountant.She prepares monthly financial statements for her client,Chick's Auto Body Shop.Presently,though,she must summarize the data in the accounting ledgers to determine if the figures are correct and balanced.Olivia will prepare a statement of cash flows in order to complete this step of the cycle.

Accepted Answer

A) True 
 B)False

Question 12

Carlisle Communications is preparing its statement of cash flows.Among other things,this statement will show:

Accepted Answer

A)  net income from operations after taxes. 
B)  general expenses and operating expenses. 
C)  cash inflows and cash outflows that resulted from financing activities. 
D)  the total owners' equity for the firm. 
A)  net income from operations after taxes. 
B)  general expenses and operating expenses. 
C)  cash inflows and cash outflows that resulted from financing activities. 
D)  the total owners' equity for the firm.

Question 13

Net income is simply the difference between revenue and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 14

The Sarbanes-Oxley Act strengthens the protection for whistleblowers who report wrongful actions of company officers.

Accepted Answer

A) True 
 B)False

Question 15

What is the difference between a profit [net income after taxes] on an income statement and the cash balance reflected at the bottom of the statement of cash flows?

Accepted Answer

The income statement will show:
• net re

Question 16

In addition to the tasks of recording and classifying accounting information,the best accounting software programs currently available for small businesses have the ability to make financial decisions,thus eliminating the need for owners of small businesses to consult with accountants or understand accounting terminology.

Accepted Answer

A) True 
 B)False

Question 17

Churches,schools,and charitable organizations all hire accountants.

Accepted Answer

A) True 
 B)False

Question 18

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

Accepted Answer

A) True 
 B)False

Question 19

In the Making Ethical Decisions box titled,"Would You Cook the Books?," the situation provides the student with an ethical dilemma that might present itself to an accounting professional.The story focuses on: Is it ethical to __________________________

Accepted Answer

A)  transfer long-term liabilities on the balance sheet to the balance sheet of a secondary firm? 
B)  inflate the values of assets on the Balance Sheet? 
C)  account for sales and profits at a time period,before or after the time these sales and profits actually occurred? 
D)  change one's method of accounting for inventory during the same fiscal year? 
A)  transfer long-term liabilities on the balance sheet to the balance sheet of a secondary firm? 
B)  inflate the values of assets on the Balance Sheet? 
C)  account for sales and profits at a time period,before or after the time these sales and profits actually occurred? 
D)  change one's method of accounting for inventory during the same fiscal year?

Question 20

Citywide Insurance Corporation's internal accountants can prepare an audit for the company.

Accepted Answer

A) True 
 B)False

A bookkeeper's first task is to:

A firm's ________ reports the profit or loss for the firm over a specified time period.

Oklahoma Chemicals plans to use its computers to post information from journals to the ledger instantaneously.One obvious benefit of this technology is:

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31,2010: The year end cash balance for this firm is:

The Barkley Company balance sheet shows the following items: Accounts payable totaling $50,000;salaries payable totaling $65,000,and notes payable totaling $100,000.These are liabilities,or money that the firm owes others.

A _________ summarizes all the data from the account ledgers to verify that they are correct and balanced.

Because each business is unique,the accounting profession recognizes that the accounting principles followed by one company may need to be completely different from the accounting principles followed by another firm.

A(n)___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

Carlisle Communications is preparing its statement of cash flows.Among other things,this statement will show:

Net income is simply the difference between revenue and cost of goods sold.

The Sarbanes-Oxley Act strengthens the protection for whistleblowers who report wrongful actions of company officers.

What is the difference between a profit [net income after taxes] on an income statement and the cash balance reflected at the bottom of the statement of cash flows?

Churches,schools,and charitable organizations all hire accountants.

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

In the Making Ethical Decisions box titled,"Would You Cook the Books?," the situation provides the student with an ethical dilemma that might present itself to an accounting professional.The story focuses on: Is it ethical to __________________________

Citywide Insurance Corporation's internal accountants can prepare an audit for the company.

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

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Exam 17: Understanding Accounting and Financial Information

A bookkeeper's first task is to:

A firm's ________ reports the profit or loss for the firm over a specified time period.

Oklahoma Chemicals plans to use its computers to post information from journals to the ledger instantaneously.One obvious benefit of this technology is:

Costas Calendar Company's Statement of Cash Flows showed the following activities for the year ended December 31,2010: The year end cash balance for this firm is:

The Barkley Company balance sheet shows the following items: Accounts payable totaling $50,000;salaries payable totaling $65,000,and notes payable totaling $100,000.These are liabilities,or money that the firm owes others.

A _________ summarizes all the data from the account ledgers to verify that they are correct and balanced.

Because each business is unique,the accounting profession recognizes that the accounting principles followed by one company may need to be completely different from the accounting principles followed by another firm.

A(n)___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

Carlisle Communications is preparing its statement of cash flows.Among other things,this statement will show:

Net income is simply the difference between revenue and cost of goods sold.

The Sarbanes-Oxley Act strengthens the protection for whistleblowers who report wrongful actions of company officers.

What is the difference between a profit [net income after taxes] on an income statement and the cash balance reflected at the bottom of the statement of cash flows?

Churches,schools,and charitable organizations all hire accountants.

Double-entry bookkeeping can help identify a recording error made by a bookkeeper.

In the Making Ethical Decisions box titled,"Would You Cook the Books?," the situation provides the student with an ethical dilemma that might present itself to an accounting professional.The story focuses on: Is it ethical to __________________________

Citywide Insurance Corporation's internal accountants can prepare an audit for the company.

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

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