Question 1

A low inventory turnover ratio may indicate

Accepted Answer

A)  higher revenue. 
B)  having to replenish inventory often. 
C)  low customer satisfaction. 
D)  having too much obsolete inventory. 
E)  efficiency in selling inventory. 
A)  higher revenue. 
B)  having to replenish inventory often. 
C)  low customer satisfaction. 
D)  having too much obsolete inventory. 
E)  efficiency in selling inventory.

Question 2

Second Harvest Tractors sold 10,000 shares of new stock last year. How would this be classified on a cash flow statement?

Accepted Answer

A)  financing activities 
B)  shareholder activities 
C)  operating activities 
D)  investing activities 
E)  fixed activities 
A)  financing activities 
B)  shareholder activities 
C)  operating activities 
D)  investing activities 
E)  fixed activities

Question 3

Journee Camping Supply Store has net sales of $900,000, cost of goods sold of $550,000, income before taxes of $55,000 and income tax expense of $5,000. What is its return on sales?

Accepted Answer

A)  9.10% 
B)  15.71% 
C)  6.11% 
D)  5.56% 
E)  14.29% 
A)  9.10% 
B)  15.71% 
C)  6.11% 
D)  5.56% 
E)  14.29%

Question 4

In a cash flow statement, cash flows from investing activities would include

Accepted Answer

A)  cash received from sales. 
B)  payment of notes payable. 
C)  payment of mortgage payable. 
D)  purchase of equipment. 
E)  cash paid for inventory. 
A)  cash received from sales. 
B)  payment of notes payable. 
C)  payment of mortgage payable. 
D)  purchase of equipment. 
E)  cash paid for inventory.

Question 5

Dr. Badger's Pet Store is applying for a loan from the bank. The company has liabilities of $670,000 and owners' equity of $250,000. What is the debt to owners' equity ratio for Dr. Badger's Pet Store?

Accepted Answer

A)  4.20 percent 
B)  3.11 percent 
C)  2.68 percent 
D)  0.37 percent 
E)  1.10 percent 
A)  4.20 percent 
B)  3.11 percent 
C)  2.68 percent 
D)  0.37 percent 
E)  1.10 percent

Question 6

Get It Company wants to determine how well it is using its assets to generate profits. It knows that its net income for the year was $20,000. It also had $16,000 of cash, $70,000 of inventory, land and buildings valued at $250,000, $50,000 of accounts receivable, and goodwill valued at $20,000. What is Get It Company's return on assets?

Accepted Answer

A)  5.46% 
B)  4.69% 
C)  5.18% 
D)  4.49% 
E)  4.92% 
A)  5.46% 
B)  4.69% 
C)  5.18% 
D)  4.49% 
E)  4.92%

Question 7

Define double-entry bookkeeping and describe how and why it is used when recording transactions.

Accepted Answer

Double-entry bookkeeping is a method of

Question 8

What ismost likely to happen as a company's debt to owners' equity approaches 100%?

Accepted Answer

A)  It will be easier to service current debts. 
B)  It will be more difficult to borrow money. 
C)  It will have more frequent sales of inventory. 
D)  It will have improved return on investment for owners. 
E)  It will have a decreased return on sales. 
A)  It will be easier to service current debts. 
B)  It will be more difficult to borrow money. 
C)  It will have more frequent sales of inventory. 
D)  It will have improved return on investment for owners. 
E)  It will have a decreased return on sales.

Question 9

Brown Bag Liquor Emporium has short-term liabilities of $150,000 and long-term liabilities of $200,000. With gross profits of $500,000 and owners' equity of $100,000, calculate its debt to owners' equity ratio.

Accepted Answer

A)  28.57% 
B)  15.00% 
C)  35.00% 
D)  5.83% 
E)  7.00% 
A)  28.57% 
B)  15.00% 
C)  35.00% 
D)  5.83% 
E)  7.00%

Question 10

The four types of financial ratios used in ratio analysis help an accountant to

Accepted Answer

A)  manage annual cash flow. 
B)  verify current cash balance. 
C)  account for accrued depreciation. 
D)  ensure an accurate trial balance. 
E)  compare performance with similar firms. 
A)  manage annual cash flow. 
B)  verify current cash balance. 
C)  account for accrued depreciation. 
D)  ensure an accurate trial balance. 
E)  compare performance with similar firms.

Question 11

Phelix is an accounting intern and is preparing a presentation regarding his experience. He has been asked to describe how the accounting equation is used in relation to the balance sheet and to provide examples of each type of data that is found in the balance sheet. What should Phelix use for his presentation?

Accepted Answer

Phelix should start his presentation by

Question 12

Paresh's investors informed him that his $1 million in sales minus sales returns, allowances, and cost of goods sold of $900,000, left only $100,000 in

Accepted Answer

A)  cost of goods sold. 
B)  gross profit. 
C)  sales revenues. 
D)  gross sales. 
E)  net sales. 
A)  cost of goods sold. 
B)  gross profit. 
C)  sales revenues. 
D)  gross sales. 
E)  net sales.

Question 13

During which step of the accounting process is a trial balance run?

Accepted Answer

A)  classification 
B)  reporting 
C)  summarization 
D)  recording 
E)  collection 
A)  classification 
B)  reporting 
C)  summarization 
D)  recording 
E)  collection

Question 14

Peyton was just promoted into an accounting role and is responsible for completing the annual cash flow statement for McGhee Tractors. He isn't sure what to do. Describe the purpose and importance of the cash flow statement to Peyton. List and define the elements he will need to complete this task.

Accepted Answer

The cash flow statement is a financial r

Question 15

What is used to evaluate how well management uses a firm's assets to generate revenue?

Accepted Answer

A)  efficiency ratio 
B)  liquidity ratio 
C)  acid-test ratio 
D)  current ratio 
E)  debt to owners' equity 
A)  efficiency ratio 
B)  liquidity ratio 
C)  acid-test ratio 
D)  current ratio 
E)  debt to owners' equity

Question 16

Carla was balancing the books when she realized that she entered a transaction of $102.50 in one place, but she entered the same transaction as $105.20 in another place. Carla was able to catch this error because she was using the ______ method of bookkeeping.

Accepted Answer

A)  single-entry 
B)  spreadsheet 
C)  double-entry 
D)  journal 
E)  debit/credit 
A)  single-entry 
B)  spreadsheet 
C)  double-entry 
D)  journal 
E)  debit/credit

Question 17

Nakia has a small accounting company with three employees. She buys each person a new computer every three years. The reduction in value of Nakia's older computers would be listed on a balance sheet as

Accepted Answer

A)  asset decay. 
B)  accumulated depreciation. 
C)  asset decline. 
D)  inventory deterioration. 
E)  equipment downgrade. 
A)  asset decay. 
B)  accumulated depreciation. 
C)  asset decline. 
D)  inventory deterioration. 
E)  equipment downgrade.

Question 18

Pedro's job is to keep track of all of the company's financial transactions and record them. Pedro is

Accepted Answer

A)  a bookkeeper. 
B)  a financial manager. 
C)  a department head. 
D)  an investor. 
E)  a board member. 
A)  a bookkeeper. 
B)  a financial manager. 
C)  a department head. 
D)  an investor. 
E)  a board member.

Question 19

Melanie's Diner has current assets of $75,000 and current liabilities of $16,500. She is expecting sales this week of $12,500. What is Melanie's Diner's current ratio?

Accepted Answer

A)  5.30 
B)  4.54 
C)  6.0 
D)  8.3 
E)  22 
A)  5.30 
B)  4.54 
C)  6.0 
D)  8.3 
E)  22

Question 20

Some businesses may legally show prepaid expenses and marketable securities as part of their current assets.

Accepted Answer

A) True 
 B)False

A low inventory turnover ratio may indicate

Second Harvest Tractors sold 10,000 shares of new stock last year. How would this be classified on a cash flow statement?

Journee Camping Supply Store has net sales of $900,000, cost of goods sold of $550,000, income before taxes of $55,000 and income tax expense of $5,000. What is its return on sales?

In a cash flow statement, cash flows from investing activities would include

Dr. Badger's Pet Store is applying for a loan from the bank. The company has liabilities of $670,000 and owners' equity of $250,000. What is the debt to owners' equity ratio for Dr. Badger's Pet Store?

Define double-entry bookkeeping and describe how and why it is used when recording transactions.

What ismost likely to happen as a company's debt to owners' equity approaches 100%?

Brown Bag Liquor Emporium has short-term liabilities of $150,000 and long-term liabilities of $200,000. With gross profits of $500,000 and owners' equity of $100,000, calculate its debt to owners' equity ratio.

The four types of financial ratios used in ratio analysis help an accountant to

Paresh's investors informed him that his $1 million in sales minus sales returns, allowances, and cost of goods sold of $900,000, left only $100,000 in

During which step of the accounting process is a trial balance run?

Peyton was just promoted into an accounting role and is responsible for completing the annual cash flow statement for McGhee Tractors. He isn't sure what to do. Describe the purpose and importance of the cash flow statement to Peyton. List and define the elements he will need to complete this task.

What is used to evaluate how well management uses a firm's assets to generate revenue?

Carla was balancing the books when she realized that she entered a transaction of $102.50 in one place, but she entered the same transaction as $105.20 in another place. Carla was able to catch this error because she was using the ______ method of bookkeeping.

Nakia has a small accounting company with three employees. She buys each person a new computer every three years. The reduction in value of Nakia's older computers would be listed on a balance sheet as

Pedro's job is to keep track of all of the company's financial transactions and record them. Pedro is

Melanie's Diner has current assets of $75,000 and current liabilities of $16,500. She is expecting sales this week of $12,500. What is Melanie's Diner's current ratio?

Some businesses may legally show prepaid expenses and marketable securities as part of their current assets.

Acting Ethically and Socially Responsible

Fundamentals of Economics and Types of Markets

The Development of the Global Economy

Entrepreneurship: From Startup to Growth

Accounting and Financial Statements

Core Components of Finance and Banking

Securities, Investments, and Financial Literacy

Essentials of Leadership and Management

Operations Management

Human Resource Management and Labor Relations

Organizational Behavior

Introduction to Marketing

Products

Pricing and Distribution

Promotion Mix: Tools, Goals, and Strategies

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Exam 1: Fundamentals of the Business World

A low inventory turnover ratio may indicate

Second Harvest Tractors sold 10,000 shares of new stock last year. How would this be classified on a cash flow statement?

Journee Camping Supply Store has net sales of $900,000, cost of goods sold of $550,000, income before taxes of $55,000 and income tax expense of $5,000. What is its return on sales?

In a cash flow statement, cash flows from investing activities would include

Dr. Badger's Pet Store is applying for a loan from the bank. The company has liabilities of $670,000 and owners' equity of $250,000. What is the debt to owners' equity ratio for Dr. Badger's Pet Store?

Define double-entry bookkeeping and describe how and why it is used when recording transactions.

What ismost likely to happen as a company's debt to owners' equity approaches 100%?

Brown Bag Liquor Emporium has short-term liabilities of $150,000 and long-term liabilities of $200,000. With gross profits of $500,000 and owners' equity of $100,000, calculate its debt to owners' equity ratio.

The four types of financial ratios used in ratio analysis help an accountant to

Paresh's investors informed him that his $1 million in sales minus sales returns, allowances, and cost of goods sold of $900,000, left only $100,000 in

During which step of the accounting process is a trial balance run?

Peyton was just promoted into an accounting role and is responsible for completing the annual cash flow statement for McGhee Tractors. He isn't sure what to do. Describe the purpose and importance of the cash flow statement to Peyton. List and define the elements he will need to complete this task.

What is used to evaluate how well management uses a firm's assets to generate revenue?

Carla was balancing the books when she realized that she entered a transaction of $102.50 in one place, but she entered the same transaction as $105.20 in another place. Carla was able to catch this error because she was using the ______ method of bookkeeping.

Nakia has a small accounting company with three employees. She buys each person a new computer every three years. The reduction in value of Nakia's older computers would be listed on a balance sheet as

Pedro's job is to keep track of all of the company's financial transactions and record them. Pedro is

Melanie's Diner has current assets of $75,000 and current liabilities of $16,500. She is expecting sales this week of $12,500. What is Melanie's Diner's current ratio?

Some businesses may legally show prepaid expenses and marketable securities as part of their current assets.

Acting Ethically and Socially Responsible

Fundamentals of Economics and Types of Markets

The Development of the Global Economy

Entrepreneurship: From Startup to Growth

Accounting and Financial Statements

Core Components of Finance and Banking

Securities, Investments, and Financial Literacy

Essentials of Leadership and Management

Operations Management

Human Resource Management and Labor Relations

Organizational Behavior

Introduction to Marketing

Products

Pricing and Distribution

Promotion Mix: Tools, Goals, and Strategies

Filters