Question 1

One criticism of GAAP is that it is too rigid and fails to take into account the fact that one size doesn't fit all in accounting.

Accepted Answer

A) True 
 B)False

Question 2

Why did accounting firms cease to be truly independent and objective during the 1990s and the early part of the 21st century?

Accepted Answer

A) because they sat on the same board of directors as the firms they audited 
B) because they also consulted for the same firms they audited 
C) because they played golf with the heads of the firms that they audited 
D) because they had money invested in the company they audited 
A) because they sat on the same board of directors as the firms they audited 
B) because they also consulted for the same firms they audited 
C) because they played golf with the heads of the firms that they audited 
D) because they had money invested in the company they audited

Question 3

Define the term accounting,and explain how accounting information is used by a variety of stakeholders.

Accepted Answer

Accounting is a system for recognizing,r

Question 4

What technique is used by managerial accountants to assign product costs based on links between activities that drive costs and the production of specific products?

Accepted Answer

A) actual basis costing 
B) activity-based costing 
C) actuarial-based costing 
D) break-even analysis 
A) actual basis costing 
B) activity-based costing 
C) actuarial-based costing 
D) break-even analysis

Question 5

When analyzing financial statements what should you make sure to read because it can be very revealing?

Accepted Answer

A) the notes to financial statements 
B) the president's comments 
C) the board of directors' comments 
D) the newspapers' comments 
A) the notes to financial statements 
B) the president's comments 
C) the board of directors' comments 
D) the newspapers' comments

Question 6

Explain how financial accounting and managerial accounting differ.

Accepted Answer

The answer of Explain how financial accounting and managerial accounting...

Question 7

The statement of retained earnings shows how retained earnings have changed from one accounting period to the next.By subtracting dividends paid to shareholders from net income,managers will see changes in this statement over time.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following indicates whether a firm earned a profit or suffered a loss over the past accounting period?

Accepted Answer

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

Question 9

Assets = Liabilities + Net income.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a system for recognizing,recording,organizing,summarizing,analyzing,and reporting information about the financial transactions that affect an organization?

Accepted Answer

A) accounting 
B) bookkeeping 
C) auditing 
D) managerial finance 
A) accounting 
B) bookkeeping 
C) auditing 
D) managerial finance

Question 11

Balance sheets only reflect the assets and liabilities of the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 12

Managerial accounting involves developing standardized reports according to a predetermined schedule.

Accepted Answer

A) True 
 B)False

Question 13

What are the major financial statements? Describe the key elements of those financial statements.

Accepted Answer

The major financial statements are the b

Question 14

The amount of cash at the end of the period,as reflected on the statement of cash flows,should match which of the following?

Accepted Answer

A) cash on the current balance sheet 
B) retained earnings for the previous reporting period 
C) liabilities for next accounting period 
D) retained earnings for the same period 
A) cash on the current balance sheet 
B) retained earnings for the previous reporting period 
C) liabilities for next accounting period 
D) retained earnings for the same period

Question 15

Lottadoe's liabilities are $130 000,and its owners' equity is $170 000.Which of the following is true about Lottadoe?

Accepted Answer

A) Its total assets are $300 000. 
B) Its net income for the current year was $300 000. 
C) Its net cash flow for the current year was $40 000. 
D) Its net income is $40 000. 
A) Its total assets are $300 000. 
B) Its net income for the current year was $300 000. 
C) Its net cash flow for the current year was $40 000. 
D) Its net income is $40 000.

Question 16

According to the accounting equation,Assets - Expenses = Net Income.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the purpose of each of the following activities performed by managerial accountants:
(1)product costing
(2)incremental analysis
(3)budgeting

Accepted Answer

Managers must have an accurate measure o

Question 18

What is the term for the claims owners have against the firm's assets?

Accepted Answer

A) assets 
B) owners' equity 
C) liabilities 
D) loans payable 
A) assets 
B) owners' equity 
C) liabilities 
D) loans payable

Question 19

Triple bottom line is a broader set of performance measures focusing on which of the following?

Accepted Answer

A) profits, performance, people 
B) profits, public image, planet 
C) profits, people, planet 
D) profits, precision, planet 
A) profits, performance, people 
B) profits, public image, planet 
C) profits, people, planet 
D) profits, precision, planet

Question 20

Which of the following describes the method of accounting where revenues are recognized when they are earned and payment is reasonably assured?

Accepted Answer

A) actuarial 
B) managerial 
C) accrual 
D) LIFO 
A) actuarial 
B) managerial 
C) accrual 
D) LIFO

Exam 7: Accounting: Decision Making by the Numbers

One criticism of GAAP is that it is too rigid and fails to take into account the fact that one size doesn't fit all in accounting.

Why did accounting firms cease to be truly independent and objective during the 1990s and the early part of the 21st century?

Define the term accounting,and explain how accounting information is used by a variety of stakeholders.

What technique is used by managerial accountants to assign product costs based on links between activities that drive costs and the production of specific products?

When analyzing financial statements what should you make sure to read because it can be very revealing?

Explain how financial accounting and managerial accounting differ.

The statement of retained earnings shows how retained earnings have changed from one accounting period to the next.By subtracting dividends paid to shareholders from net income,managers will see changes in this statement over time.

Which of the following indicates whether a firm earned a profit or suffered a loss over the past accounting period?

Assets = Liabilities + Net income.

Which of the following is a system for recognizing,recording,organizing,summarizing,analyzing,and reporting information about the financial transactions that affect an organization?

Balance sheets only reflect the assets and liabilities of the cost of goods sold.

Managerial accounting involves developing standardized reports according to a predetermined schedule.

What are the major financial statements? Describe the key elements of those financial statements.

The amount of cash at the end of the period,as reflected on the statement of cash flows,should match which of the following?

Lottadoe's liabilities are $130 000,and its owners' equity is $170 000.Which of the following is true about Lottadoe?

According to the accounting equation,Assets - Expenses = Net Income.

Discuss the purpose of each of the following activities performed by managerial accountants: (1)product costing (2)incremental analysis (3)budgeting

What is the term for the claims owners have against the firm's assets?

Triple bottom line is a broader set of performance measures focusing on which of the following?

Which of the following describes the method of accounting where revenues are recognized when they are earned and payment is reasonably assured?

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