Exam 7: Accounting: Decision Making by the Numbers

Since it deals strictly with numbers,the practice of accounting is free from ethical considerations.

The process of developing the operating budget begins with which of the following?

Operating budget documents include the cash budget and the capital budget.

Which of the following shows the cash flowing in and out of a firm through its operating,investing,and financing activities?

Which of the following perform or assist in a wide variety of tasks for the firms in which they work including budgeting,cost and asset management,and the preparation of reports for the firm's stakeholders?

Net income is the difference between the revenue a firm earns and the expenses it incurs in a given time period.

The accounting profession is seldom concerned with the interpretation of financial information.

Forensic accountants provide standardized reports primarily intended for managers and other decision-makers employed by an organization.

List and describe at least three users of a firm's accounting information.

Accounting systems are utilized by companies for several reasons,but they have little value when it comes to making economic decisions.

Which of the following would be listed in the liabilities section of the balance sheet?

Recently,some critics of current practices have suggested that GAAP's flexibility allows managers to manipulate financial statements in ways that make their firms' financial performance appear to be better than it really was.

Which budget deals with the firm's plans for investing in major fixed assets and long-term projects?

Mary Reardon is an employee and shareholder for the McNeely Company.Mary is considered a primary user of her firm's accounting information.

The vast majority of firms today use computerized accounting systems and sophisticated software to record and summarize transactions.

The accounting entity approach is an accounting method that recognizes revenue when it is earned and matches expenses to the revenues produced.

Which of the following is issued if the external auditor does not find any problems with the way a firm prepares and reports its financial statements?

Which type of analysis compares information contained in a firm's financial statements over a period of two or more years?

Where would one find a change to the way a company funds its pension plan for its employees?

As a financial manager for his firm,Martin Meyer is worried about possible cash shortages his firm might face over the next few months.What type of budget would help him identify periods when cash might be very tight?