Question 1

Since furniture and store equipment for Rosalind's Boutique will be held or used for a period longer than one year, they are considered

Accepted Answer

A)  fixed assets. 
B)  owners' equity. 
C)  revenue. 
D)  current assets. 
E)  prepaid expenses. 
A)  fixed assets. 
B)  owners' equity. 
C)  revenue. 
D)  current assets. 
E)  prepaid expenses. A

Question 2

A prepaid expense would be classified as

Accepted Answer

A)  an expense. 
B)  an unearned revenue. 
C)  a liability. 
D)  an asset. 
E)  cost of goods sold. 
A)  an expense. 
B)  an unearned revenue. 
C)  a liability. 
D)  an asset. 
E)  cost of goods sold. D

Question 3

Most data gathered for an MIS come from

Accepted Answer

A)  customers. 
B)  bankers. 
C)  external sources. 
D)  internal sources. 
E)  information obtained from data firms. 
A)  customers. 
B)  bankers. 
C)  external sources. 
D)  internal sources. 
E)  information obtained from data firms. D

Question 4

Mary Nettles works for a marketing and advertising firm. She must choose one ad piece from a number of potential ad pieces. To ensure that she makes the right decision, she should

Accepted Answer

A)  put a brief description of each ad piece in a hat and draw one. 
B)  ignore any feedback that she gets from coworkers and consumers and make the decision herself. 
C)  gather information from coworkers and consumers on their reaction to the different ad pieces. 
D)  let her supervisor choose the ad piece. 
E)  discard all ad pieces and develop a new advertising campaign. 
A)  put a brief description of each ad piece in a hat and draw one. 
B)  ignore any feedback that she gets from coworkers and consumers and make the decision herself. 
C)  gather information from coworkers and consumers on their reaction to the different ad pieces. 
D)  let her supervisor choose the ad piece. 
E)  discard all ad pieces and develop a new advertising campaign.

Question 5

A private accountant is an accountant whose services may be hired on a fee basis by individuals or business firms.

Accepted Answer

A) True 
 B)False

Question 6

Today corporations are required to send their stockholders an annual report. Assume that you are a prospective investor trying to decide if you should invest in a specific corporation. What type of information is contained in an annual report that would help you decide if this is the right investment for you?

Accepted Answer

An annual report typically contains a va

Question 7

Since business has been rapidly expanding, A Shot of Sugar Bakery decides to purchase a second industrial oven. The cash paid for this oven would be listed in the ____ section of the statement of cash flows.

Accepted Answer

A)  operating 
B)  purchasing 
C)  investing 
D)  financing 
E)  business 
A)  operating 
B)  purchasing 
C)  investing 
D)  financing 
E)  business

Question 8

Extreme Sports, a bicycle, ATV, and motorbike retailer, buys its inventory on credit. Before Extreme pays for this merchandise in 60 days, the money owed is classified on its balance sheet as a(n)

Accepted Answer

A)  current asset. 
B)  intangible asset. 
C)  account payable. 
D)  long-term liability. 
E)  account receivable. 
A)  current asset. 
B)  intangible asset. 
C)  account payable. 
D)  long-term liability. 
E)  account receivable.

Question 9

Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.

Accepted Answer

A) True 
 B)False

Question 10

Information rules do all of the following except

Accepted Answer

A)  shorten the time spent analyzing choices. 
B)  correctly guide marketing decision makers. 
C)  help both managers and consumers make decisions. 
D)  remain valid forever once they are established. 
E)  emerge when research confirms the same results in repeated trials. 
A)  shorten the time spent analyzing choices. 
B)  correctly guide marketing decision makers. 
C)  help both managers and consumers make decisions. 
D)  remain valid forever once they are established. 
E)  emerge when research confirms the same results in repeated trials.

Question 11

The ending cash balance reported on the statement of cash flows is the same as the net sales amount reported on the firm's income statement.

Accepted Answer

A) True 
 B)False

Question 12

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA. The bank is requiring Nathan to have his financial statements

Accepted Answer

A)  verified. 
B)  audited. 
C)  affirmed. 
D)  certified. 
E)  insured. 
A)  verified. 
B)  audited. 
C)  affirmed. 
D)  certified. 
E)  insured.

Question 13

Patents and copyrights confer value on a firm but do not exist physically. Thus, they are identified as

Accepted Answer

A)  current assets. 
B)  prepaid expenses. 
C)  fixed assets. 
D)  intangible assets. 
E)  owners' equity. 
A)  current assets. 
B)  prepaid expenses. 
C)  fixed assets. 
D)  intangible assets. 
E)  owners' equity.

Question 14

Why would managers, lenders, and investors compare current financial statements with those prepared for past accounting periods?

Accepted Answer

Managers, lenders, and investors often c

Question 15

Resources that a firm owns are called

Accepted Answer

A)  revenue. 
B)  liabilities. 
C)  owners' equity. 
D)  assets. 
E)  expenses. 
A)  revenue. 
B)  liabilities. 
C)  owners' equity. 
D)  assets. 
E)  expenses.

Question 16

Information rules

Accepted Answer

A)  emerge when research confirms the same results each time a problem is studied. 
B)  are of no use to most managers because situations are constantly changing. 
C)  are often called the great confusers. 
D)  cost too much to implement. 
E)  are valid only when they can be used to aid the decision-making process over a large number of years. 
A)  emerge when research confirms the same results each time a problem is studied. 
B)  are of no use to most managers because situations are constantly changing. 
C)  are often called the great confusers. 
D)  cost too much to implement. 
E)  are valid only when they can be used to aid the decision-making process over a large number of years.

Question 17

If the assets of Martin's Pet Store are $107,000 and the owners' equity is $75,000, which of the following is a true statement?

Accepted Answer

A)  The owners' investment equals $182,000. 
B)  The current assets are worth $32,000. 
C)  The new income for the period is $32,000. 
D)  The long-term liabilities are $75,000. 
E)  The liabilities are $32,000. 
A)  The owners' investment equals $182,000. 
B)  The current assets are worth $32,000. 
C)  The new income for the period is $32,000. 
D)  The long-term liabilities are $75,000. 
E)  The liabilities are $32,000.

Question 18

All of the following would be examples of internal information sources except company

Accepted Answer

A)  records. 
B)  managers. 
C)  competitors. 
D)  reports. 
E)  meetings. 
A)  records. 
B)  managers. 
C)  competitors. 
D)  reports. 
E)  meetings.

Question 19

Define a balance sheet (also called a statement of financial position). What does it balance?

Accepted Answer

A balance sheet, also known as a stateme

Question 20

The following quotation would most likely be found in the ____ of a business report: "This report evaluates the significant decrease in sales experienced in the previous quarter and incorporates the results of surveys and interviews with customers, management, and economists."

Accepted Answer

A)  body 
B)  conclusion 
C)  analysis 
D)  recommendations 
E)  introduction 
A)  body 
B)  conclusion 
C)  analysis 
D)  recommendations 
E)  introduction

Exam 17: Using Management and Accounting Information

Since furniture and store equipment for Rosalind's Boutique will be held or used for a period longer than one year, they are considered

A prepaid expense would be classified as

Most data gathered for an MIS come from

Mary Nettles works for a marketing and advertising firm. She must choose one ad piece from a number of potential ad pieces. To ensure that she makes the right decision, she should

A private accountant is an accountant whose services may be hired on a fee basis by individuals or business firms.

Since business has been rapidly expanding, A Shot of Sugar Bakery decides to purchase a second industrial oven. The cash paid for this oven would be listed in the ____ section of the statement of cash flows.

Extreme Sports, a bicycle, ATV, and motorbike retailer, buys its inventory on credit. Before Extreme pays for this merchandise in 60 days, the money owed is classified on its balance sheet as a(n)

Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.

Information rules do all of the following except

The ending cash balance reported on the statement of cash flows is the same as the net sales amount reported on the firm's income statement.

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA. The bank is requiring Nathan to have his financial statements

Patents and copyrights confer value on a firm but do not exist physically. Thus, they are identified as

Why would managers, lenders, and investors compare current financial statements with those prepared for past accounting periods?

Resources that a firm owns are called

Information rules

If the assets of Martin's Pet Store are $107,000 and the owners' equity is $75,000, which of the following is a true statement?

All of the following would be examples of internal information sources except company

Define a balance sheet (also called a statement of financial position). What does it balance?

The following quotation would most likely be found in the ____ of a business report: "This report evaluates the significant decrease in sales experienced in the previous quarter and incorporates the results of surveys and interviews with customers, management, and economists."

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

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