Exam 7: Accounting: Decision Making by the Numbers

Tiny Timber Tree Farms has decided to adopt activity-based costing.Which of the following is one likely reason the firm's accountants decided on this approach?

Private,internal,and government accountants are business titles used by certified public accountants.

Revenue,expenses,and net income are the key sections found on a statement of cash flows.

What has the accounting profession adopted to guide the practice of financial accounting in order to provide external shareholders with relevant,reliable,consistent,and comparable financial information?

Activity-based costing is a technique used by managerial accountants to assign product costs based on links between activities that drive costs and the production of specific products.

An unqualified opinion should set off alarm bells to view the firm's financial statements with extreme skepticism.

Public accountants provide a variety of accounting services for clients on a fee basis.

What must publicly traded corporations in Canada have a public accountant do?

Tiny Timber Tree Farms applied to United Bank for a business loan.Which financial statements would the loan officer of the bank be most likely to request?

In evaluating companies across industries,what will financial managers often read as a means of interpreting the statements correctly?

Expenses are listed on the left side of a balance sheet.

Which item would be listed first on the income statement?

Recording financial transactions is an accounting function.

When an external audit doesn't uncover any problems with the firm's financial methods and statements,the auditor will issue an unqualified opinion.

Which type of accounting addresses the needs of external stakeholders,including shareholders,creditors,and government regulators?

When auditors discover more serious and widespread problems with a firm's statements they will offer an adverse opinion.

Horizontal analysis is an analysis of financial statements comparing account values reported over a period of years.This information is used to serve as a basis of comparison and to identify trends.

For what purpose would shareholders be most likely to use accounting information provided by their firm?

The managers of a company are the only stakeholders of a company that have a legitimate interest in its accounting information.

If an auditor identifies limited problems with the firm's financial methods and statements but believes that in all other aspects the statements are fair and accurate,which of the following will be expressed in the auditor's report?