Question 1

Human resources managers need management information in all of the following areas except

Accepted Answer

A)  wage levels and benefits packages. 
B)  financial ratios. 
C)  employment practices legislation. 
D)  union activities. 
E)  the firm's growth plans. 
A)  wage levels and benefits packages. 
B)  financial ratios. 
C)  employment practices legislation. 
D)  union activities. 
E)  the firm's growth plans.

Question 2

Describe each of the five functions of a management information system.

Accepted Answer

1. Data collection: A management informa

Question 3

The transformation of data into a form that is useful for a specific purpose is called data processing.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A)  The more information a manager has, the more risk there is when making a decision. 
B)  The more information a manager has, the less risk there is when making a decision. 
C)  Risk improves decision making. 
D)  Most managers make decisions without any information. 
E)  When the amount of information is low, there is less risk. 
A)  The more information a manager has, the more risk there is when making a decision. 
B)  The more information a manager has, the less risk there is when making a decision. 
C)  Risk improves decision making. 
D)  Most managers make decisions without any information. 
E)  When the amount of information is low, there is less risk.

Question 5

The value of goods on hand for sale to customers is called

Accepted Answer

A)  sales. 
B)  merchandise inventory. 
C)  cost of goods sold. 
D)  prepaid expenses. 
E)  operating expenses. 
A)  sales. 
B)  merchandise inventory. 
C)  cost of goods sold. 
D)  prepaid expenses. 
E)  operating expenses.

Question 6

Which of the following is true about CPAs?

Accepted Answer

A)  Almost everyone who does accounting work is a CPA. 
B)  CPA standards are the same in every state. 
C)  CPAs must participate in continuing education programs. 
D)  Once an individual has become a CPA, no further work is necessary to retain the certification. 
E)  The portions of the CPA examination are costing, taxing, budgeting, and billing. 
A)  Almost everyone who does accounting work is a CPA. 
B)  CPA standards are the same in every state. 
C)  CPAs must participate in continuing education programs. 
D)  Once an individual has become a CPA, no further work is necessary to retain the certification. 
E)  The portions of the CPA examination are costing, taxing, budgeting, and billing.

Question 7

Typically, the majority of the data gathered for an MIS come from external sources.

Accepted Answer

A) True 
 B)False

Question 8

General Motors decides to close one of its manufacturing plants in the Midwest. GM sells the facility to a new foreign automobile manufacturer. The money GM receives from this sale would belong in the ____ section of the statement of cash flows.

Accepted Answer

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

Question 9

As the accountant for Ideal Manufacturing Company, you determine the following totals in your balance sheet: total assets―$124,000; current liabilities―$41,000; long-term liabilities―$13,000. What is the total owners' equity for this company?

Accepted Answer

A)  $178,000 
B)  $165,000 
C)  $137,000 
D)  $70,000 
E)  $0 
A)  $178,000 
B)  $165,000 
C)  $137,000 
D)  $70,000 
E)  $0

Question 10

Explain why a firm's financial statements should be audited.

Accepted Answer

A firm's financial statements should be

Question 11

The statement of financial position is also known as the balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

Wallace Plumbing Company had income from operations of $110,000. It paid federal income taxes of $26,000. What was the firm's net income after taxes?

Accepted Answer

A)  $144,000 
B)  $98,000 
C)  $84,000 
D)  $22,000 
E)  $12,000 
A)  $144,000 
B)  $98,000 
C)  $84,000 
D)  $22,000 
E)  $12,000

Question 13

Current assets are assets that can be converted quickly into cash or that will be used in two years or less.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not one of the sections included in a typical business report?

Accepted Answer

A)  Recommendations 
B)  Body 
C)  Introduction 
D)  Analysis 
E)  Conclusions 
A)  Recommendations 
B)  Body 
C)  Introduction 
D)  Analysis 
E)  Conclusions

Question 15

Numerical or verbal descriptions that usually result from measurements of some sort are called data.

Accepted Answer

A) True 
 B)False

Question 16

In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

Accepted Answer

A) True 
 B)False

Question 17

Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. After the first year of operation, the total owners' equity is listed as $60,000. Most likely, the additional $10,000 of owners' equity is

Accepted Answer

A)  common stock. 
B)  long-term liabilities. 
C)  current liabilities. 
D)  retained earnings. 
E)  a bank loan. 
A)  common stock. 
B)  long-term liabilities. 
C)  current liabilities. 
D)  retained earnings. 
E)  a bank loan.

Question 18

Christine's First Job
Christine has just earned her undergraduate degree in accounting and has successfully completed the CPA exam. She recently interviewed with a relatively small and new company and was offered a job. The offer sounded very promising; the job had opportunities to grow with the company and provided diverse challenges. Christine accepted the job.
Once Christine started working, she realized that the owners and employees did not have a general understanding of accounting. She had to teach them how data is transformed into financial information and, from that point, reported on various statements. When she talked about the statement of financial position, they had no idea what she was talking about. She was the qualified individual responsible for accounting. No one else working with her had much knowledge. They did not even know the different financial ratios that someone could use to understand the financial standing of a company. Christine knows it will be a challenge to keep everyone on the same page when it comes to numbers and reports.
-Refer to Christine's First Job. When Christine talked about the accounting equation and the resources owned by the business--the cash, inventory, and equipment--she wants to make clear that she's referring to the ____ of the firm.

Accepted Answer

A)  assets 
B)  owners' equity 
C)  liabilities 
D)  retained earnings 
E)  intangible assets 
A)  assets 
B)  owners' equity 
C)  liabilities 
D)  retained earnings 
E)  intangible assets

Question 19

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

Accepted Answer

A)  statistic 
B)  comparative number 
C)  current ratio 
D)  financial ratio 
E)  formula 
A)  statistic 
B)  comparative number 
C)  current ratio 
D)  financial ratio 
E)  formula

Question 20

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Accepted Answer

A) True 
 B)False

Exam 17: Using Management and Accounting Information

Human resources managers need management information in all of the following areas except

Describe each of the five functions of a management information system.

The transformation of data into a form that is useful for a specific purpose is called data processing.

Which of the following statements is true?

The value of goods on hand for sale to customers is called

Which of the following is true about CPAs?

Typically, the majority of the data gathered for an MIS come from external sources.

General Motors decides to close one of its manufacturing plants in the Midwest. GM sells the facility to a new foreign automobile manufacturer. The money GM receives from this sale would belong in the ____ section of the statement of cash flows.

As the accountant for Ideal Manufacturing Company, you determine the following totals in your balance sheet: total assets―$124,000; current liabilities―$41,000; long-term liabilities―$13,000. What is the total owners' equity for this company?

Explain why a firm's financial statements should be audited.

The statement of financial position is also known as the balance sheet.

Wallace Plumbing Company had income from operations of $110,000. It paid federal income taxes of $26,000. What was the firm's net income after taxes?

Current assets are assets that can be converted quickly into cash or that will be used in two years or less.

Which of the following is not one of the sections included in a typical business report?

Numerical or verbal descriptions that usually result from measurements of some sort are called data.

In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. After the first year of operation, the total owners' equity is listed as $60,000. Most likely, the additional $10,000 of owners' equity is

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

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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