Question 1

A diagram that represents several items of information in a manner that makes comparison easier is called a visual display.

Accepted Answer

A) True 
 B)False

Question 2

How would it be easier to determine if a firm made or lost money last year―by looking at the balance sheet or by looking at the income statement? Support your answer by explaining in general terms what accounts a balance sheet lists and what accounts an income statement lists.

Accepted Answer

It would be easier to determine if a fir

Question 3

A recent PricewaterhouseCoopers survey revealed that outsiders, primarily customers and intermediaries, are much more likely to be responsible for fraud committed against U.S. businesses.

Accepted Answer

A) True 
 B)False

Question 4

The purpose of ____ is to distribute timely and useful information from both internal and external sources to the decision makers who need it.

Accepted Answer

A)  a manager awareness program 
B)  a management information system 
C)  entrepreneurial information software 
D)  a computer information program 
E)  a desktop information system 
A)  a manager awareness program 
B)  a management information system 
C)  entrepreneurial information software 
D)  a computer information program 
E)  a desktop information system

Question 5

What are the three activities according to which a statement of cash flows is organized?

Accepted Answer

A)  Operating, selling, and investing 
B)  Financing, buying, selling 
C)  Investing, financing, and expensing 
D)  Processing, operating, receiving 
E)  Operating, investing, financing 
A)  Operating, selling, and investing 
B)  Financing, buying, selling 
C)  Investing, financing, and expensing 
D)  Processing, operating, receiving 
E)  Operating, investing, financing

Question 6

The specific types of information that managers need depends on their area of management and on their level within the firm.

Accepted Answer

A) True 
 B)False

Question 7

Each month, Bath & Body Works pays employees wages, telephone bills, and salaries to accountants. These are all considered

Accepted Answer

A)  cost of goods sold. 
B)  gross profit. 
C)  sales allowances. 
D)  operating expenses. 
E)  current assets. 
A)  cost of goods sold. 
B)  gross profit. 
C)  sales allowances. 
D)  operating expenses. 
E)  current assets.

Question 8

On its company computer system, Gymboree has numerical and verbal descriptions about its suppliers and their prices, which as a whole is called ____. Managers can access and use this to make decisions about suppliers.

Accepted Answer

A)  information 
B)  a database 
C)  an MIS 
D)  a DSS 
E)  data 
A)  information 
B)  a database 
C)  an MIS 
D)  a DSS 
E)  data

Question 9

Another name for the statement of financial position is the

Accepted Answer

A)  income statement. 
B)  statement of owners' equity. 
C)  earnings statement. 
D)  statement of changes. 
E)  balance sheet. 
A)  income statement. 
B)  statement of owners' equity. 
C)  earnings statement. 
D)  statement of changes. 
E)  balance sheet.

Question 10

The value of a firm's stock plus any retained earnings that have accumulated to date is referred to as

Accepted Answer

A)  current assets. 
B)  long-term liabilities. 
C)  fixed assets. 
D)  owners' equity. 
E)  revenue. 
A)  current assets. 
B)  long-term liabilities. 
C)  fixed assets. 
D)  owners' equity. 
E)  revenue.

Question 11

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

Accepted Answer

A)  Cash flows from operating activities 
B)  Cash flows from financing activities 
C)  Business cash flows 
D)  Non-business-related cash flows 
E)  Cash flows from investing activities 
A)  Cash flows from operating activities 
B)  Cash flows from financing activities 
C)  Business cash flows 
D)  Non-business-related cash flows 
E)  Cash flows from investing activities

Question 12

If the liabilities of a business are $85,000 and the owners' equity is $110,000, which of the following is a true statement?

Accepted Answer

A)  Assets equal $25,000. 
B)  Assets equal $195,000. 
C)  Assets equal $110,000. 
D)  Assets equal $85,000. 
E)  It is impossible to determine the value of the assets. 
A)  Assets equal $25,000. 
B)  Assets equal $195,000. 
C)  Assets equal $110,000. 
D)  Assets equal $85,000. 
E)  It is impossible to determine the value of the assets.

Question 13

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

Accepted Answer

Managerial accounting and financial acco

Question 14

An accountant can calculate a return on sales ratio to determine how well the firm is using the money invested by the owners.

Accepted Answer

A) True 
 B)False

Question 15

The Cheese Shoppe's liabilities total $59,000 and its owners' equity is $124,000. Which of the following is true?

Accepted Answer

A)  The total assets equal $65,000. 
B)  The firm's assets are $124,000. 
C)  The current liabilities are less than the current assets. 
D)  The total assets equal $183,000. 
E)  The firm's sales are $183,000. 
A)  The total assets equal $65,000. 
B)  The firm's assets are $124,000. 
C)  The current liabilities are less than the current assets. 
D)  The total assets equal $183,000. 
E)  The firm's sales are $183,000.

Question 16

The earnings statement is another term for the

Accepted Answer

A)  balance sheet. 
B)  income statement. 
C)  statement of financial position. 
D)  owners' equity statement. 
E)  capital statement. 
A)  balance sheet. 
B)  income statement. 
C)  statement of financial position. 
D)  owners' equity statement. 
E)  capital statement.

Question 17

Energizer offers its customers a reduction in price if they pay for their shipments of batteries within ten days of receiving them. This is a(n)

Accepted Answer

A)  sales allowance. 
B)  trade discount. 
C)  sales return. 
D)  sales discount. 
E)  inventory reduction. 
A)  sales allowance. 
B)  trade discount. 
C)  sales return. 
D)  sales discount. 
E)  inventory reduction.

Question 18

All of the following are classified as fixed assets except

Accepted Answer

A)  factory equipment. 
B)  a company car. 
C)  computers held for resale. 
D)  property. 
E)  buildings. 
A)  factory equipment. 
B)  a company car. 
C)  computers held for resale. 
D)  property. 
E)  buildings.

Question 19

Ridgley, Cooper, and Ross (RCR)
Katie is the CEO of Ridgley, Cooper, and Ross (RCR), a regional accounting firm. RCR offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, RCR could be considered a violator of the Sarbanes-Oxley Act. Katie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained.
-Refer to Ridgley, Cooper, and Ross. What does GAAP stand for?

Accepted Answer

A)  Generally accepted accounting principles 
B)  Generally accepted auditing principles 
C)  Generalized accounting and auditing principles 
D)  Generic accounting alternative practices 
E)  General administrative accounting practices 
A)  Generally accepted accounting principles 
B)  Generally accepted auditing principles 
C)  Generalized accounting and auditing principles 
D)  Generic accounting alternative practices 
E)  General administrative accounting practices

Question 20

The mortgage on Prudential Insurance's local facility will be paid off over the next 30 years. The majority of this mortgage would be classified on Prudential's balance sheet as a(n)

Accepted Answer

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

Exam 17: Using Management and Accounting Information

A diagram that represents several items of information in a manner that makes comparison easier is called a visual display.

How would it be easier to determine if a firm made or lost money last year―by looking at the balance sheet or by looking at the income statement? Support your answer by explaining in general terms what accounts a balance sheet lists and what accounts an income statement lists.

A recent PricewaterhouseCoopers survey revealed that outsiders, primarily customers and intermediaries, are much more likely to be responsible for fraud committed against U.S. businesses.

The purpose of ____ is to distribute timely and useful information from both internal and external sources to the decision makers who need it.

What are the three activities according to which a statement of cash flows is organized?

The specific types of information that managers need depends on their area of management and on their level within the firm.

Each month, Bath & Body Works pays employees wages, telephone bills, and salaries to accountants. These are all considered

On its company computer system, Gymboree has numerical and verbal descriptions about its suppliers and their prices, which as a whole is called ____. Managers can access and use this to make decisions about suppliers.

Another name for the statement of financial position is the

The value of a firm's stock plus any retained earnings that have accumulated to date is referred to as

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

If the liabilities of a business are $85,000 and the owners' equity is $110,000, which of the following is a true statement?

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

An accountant can calculate a return on sales ratio to determine how well the firm is using the money invested by the owners.

The Cheese Shoppe's liabilities total $59,000 and its owners' equity is $124,000. Which of the following is true?

The earnings statement is another term for the

Energizer offers its customers a reduction in price if they pay for their shipments of batteries within ten days of receiving them. This is a(n)

All of the following are classified as fixed assets except

The mortgage on Prudential Insurance's local facility will be paid off over the next 30 years. The majority of this mortgage would be classified on Prudential's balance sheet as a(n)

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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