Question 1

Which of the following calculates the cost of goods sold during the period?

Accepted Answer

A)  Beginning inventory plus purchases minus ending inventory 
B)  Ending inventory minus beginning inventory plus purchases 
C)  Purchases minus beginning inventory plus ending inventory 
D)  Beginning inventory plus ending inventory minus purchases 
E)  (Ending inventory plus beginning inventory) divided by two 
A)  Beginning inventory plus purchases minus ending inventory 
B)  Ending inventory minus beginning inventory plus purchases 
C)  Purchases minus beginning inventory plus ending inventory 
D)  Beginning inventory plus ending inventory minus purchases 
E)  (Ending inventory plus beginning inventory) divided by two A

Question 2

A CPA receives an operating licence from the federal government that must be renewed every three years.

Accepted Answer

A) True 
 B)False  False

Question 3

Madeline wants to determine operating income for her company. To do so, she must subtract both the cost of goods sold and all operating expenses from gross sales revenue.

Accepted Answer

A) True 
 B)False  True

Question 4

A fixed asset is

Accepted Answer

A)  an amount due from a customer who has purchased goods on credit. 
B)  an asset with long-term use or value, such as land, buildings, and equipment. 
C)  an expense, such as rent, that is paid before the upcoming period in which it is due. 
D)  an asset that can or will be converted to cash within the following year. 
E)  a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit. 
A)  an amount due from a customer who has purchased goods on credit. 
B)  an asset with long-term use or value, such as land, buildings, and equipment. 
C)  an expense, such as rent, that is paid before the upcoming period in which it is due. 
D)  an asset that can or will be converted to cash within the following year. 
E)  a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit.

Question 5

What is a budget?

Accepted Answer

A budget is a detailed stateme

Question 6

The most important user of accounting information is the government.

Accepted Answer

A) True 
 B)False

Question 7

Manhattan Corporation has total assets of $700 000, total liabilities of $200 000, and owners' equity of $500 000. What is Manhattan Corporation's debt-to-equity ratio?

Accepted Answer

$200 000/$

Question 8

Why has accounting ethics become an important issue in recent years?

Accepted Answer

There has been increased interest in acc

Question 9

The process of distributing the cost of an asset over its life is known as

Accepted Answer

A)  licensing. 
B)  subtracting methods. 
C)  cost averaging. 
D)  prepaid expenses. 
E)  depreciation. 
A)  licensing. 
B)  subtracting methods. 
C)  cost averaging. 
D)  prepaid expenses. 
E)  depreciation.

Question 10

Identify the solvency ratios and what they measure.

Accepted Answer

Solvency ratios measure risk, the abilit

Question 11

Which of the following is the most commonly used liquidity ratio?

Accepted Answer

A)  Return on equity 
B)  Return on sales 
C)  Current ratio 
D)  Quick ratio 
E)  They are all equally used. 
A)  Return on equity 
B)  Return on sales 
C)  Current ratio 
D)  Quick ratio 
E)  They are all equally used.

Question 12

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's gross profit?

Accepted Answer

A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these 
A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these

Question 13

Explain four trends that are contributing to the additional roles of the modern accountant.

Accepted Answer

First, there are fewer restrictions from

Question 14

The accounting equation is: assets = liabilities + owners' equity.

Accepted Answer

A) True 
 B)False

Question 15

Julie, a recent college graduate, is interested in business and is considering pursuing a career in accounting. Her parents are supportive, with her mother recommending that Julie become a public accountant and her father recommending that she become a private accountant. Which of the following, if true, would support the position that Julie should consider a specialty field in accounting?

Accepted Answer

A)  Julie wants to eventually pursue an MBA degree. 
B)  Colleges have different policies on whether specialty accounting courses are required. 
C)  Julie is interested in financial crimes. 
D)  Julie is interested in helping a nonprofit organization. 
E)  Julie wants to work directly for a private company. 
A)  Julie wants to eventually pursue an MBA degree. 
B)  Colleges have different policies on whether specialty accounting courses are required. 
C)  Julie is interested in financial crimes. 
D)  Julie is interested in helping a nonprofit organization. 
E)  Julie wants to work directly for a private company.

Question 16

Jack wants to compare Algoma Steel and Defasco's earnings per share. Which formula would Jack use?

Accepted Answer

A)  Net income divided by the market value of the common shares 
B)  Net income divided by the market value of the preferred shares 
C)  Total assets divided by number of common and preferred shares outstanding 
D)  Total assets divided by value of common shares outstanding 
E)  Net income divided by number of common shares outstanding 
A)  Net income divided by the market value of the common shares 
B)  Net income divided by the market value of the preferred shares 
C)  Total assets divided by number of common and preferred shares outstanding 
D)  Total assets divided by value of common shares outstanding 
E)  Net income divided by number of common shares outstanding

Question 17

What are the three major classifications of ratios that are used to analyze financial statements? What is measured by each of these types of ratios?

Accepted Answer

- Solvency ratios, both short-

Question 18

Mary Ann is considering buying an existing catering business that is up for sale. An 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 19

What is the accounting term that describes an amount paid for an existing business above the value of its other assets?

Accepted Answer

A)  A patent 
B)  A copyright 
C)  Goodwill 
D)  A franchise fee 
E)  Reputation 
A)  A patent 
B)  A copyright 
C)  Goodwill 
D)  A franchise fee 
E)  Reputation

Question 20

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Accepted Answer

A) True 
 B)False

Which of the following calculates the cost of goods sold during the period?

A CPA receives an operating licence from the federal government that must be renewed every three years.

Madeline wants to determine operating income for her company. To do so, she must subtract both the cost of goods sold and all operating expenses from gross sales revenue.

A fixed asset is

What is a budget?

The most important user of accounting information is the government.

Manhattan Corporation has total assets of $700 000, total liabilities of $200 000, and owners' equity of $500 000. What is Manhattan Corporation's debt-to-equity ratio?

Why has accounting ethics become an important issue in recent years?

The process of distributing the cost of an asset over its life is known as

Identify the solvency ratios and what they measure.

Which of the following is the most commonly used liquidity ratio?

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's gross profit?

Explain four trends that are contributing to the additional roles of the modern accountant.

The accounting equation is: assets = liabilities + owners' equity.

Jack wants to compare Algoma Steel and Defasco's earnings per share. Which formula would Jack use?

What are the three major classifications of ratios that are used to analyze financial statements? What is measured by each of these types of ratios?

Mary Ann is considering buying an existing catering business that is up for sale. An 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?

What is the accounting term that describes an amount paid for an existing business above the value of its other assets?

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Finacial Decisions and Risk Management

Filters

Exam 11: Understanding Accounting

Which of the following calculates the cost of goods sold during the period?

A CPA receives an operating licence from the federal government that must be renewed every three years.

Madeline wants to determine operating income for her company. To do so, she must subtract both the cost of goods sold and all operating expenses from gross sales revenue.

A fixed asset is

What is a budget?

The most important user of accounting information is the government.

Manhattan Corporation has total assets of $700 000, total liabilities of $200 000, and owners' equity of $500 000. What is Manhattan Corporation's debt-to-equity ratio?

Why has accounting ethics become an important issue in recent years?

The process of distributing the cost of an asset over its life is known as

Identify the solvency ratios and what they measure.

Which of the following is the most commonly used liquidity ratio?

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's gross profit?

Explain four trends that are contributing to the additional roles of the modern accountant.

The accounting equation is: assets = liabilities + owners' equity.

Jack wants to compare Algoma Steel and Defasco's earnings per share. Which formula would Jack use?

What are the three major classifications of ratios that are used to analyze financial statements? What is measured by each of these types of ratios?

Mary Ann is considering buying an existing catering business that is up for sale. An 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?

What is the accounting term that describes an amount paid for an existing business above the value of its other assets?

Depreciation is used to recognize the cost of an asset in the year in which it is purchased.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Finacial Decisions and Risk Management

Filters