Question 1

Would you expect the information needs of top managers to differ from those of middle- and lower-level managers? Explain your answer.

Accepted Answer

Yes, I would expect the information need

Question 2

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

Accepted Answer

A) True 
 B)False

Question 3

The cost of goods sold divided by the average inventory equals the

Accepted Answer

A)  gross profit on operations. 
B)  beginning inventory value. 
C)  merchandise inventory. 
D)  ending inventory value. 
E)  inventory turnover. 
A)  gross profit on operations. 
B)  beginning inventory value. 
C)  merchandise inventory. 
D)  ending inventory value. 
E)  inventory turnover.

Question 4

During the year Comer, Inc., had $200,000 in goods available for sale. At the end of the accounting period it had an ending inventory of $40,000. This reveals that it had sold all but ____ worth of the available goods.

Accepted Answer

A)  $200,000 
B)  $160,000 
C)  $40,000 
D)  $20,000 
E)  $10,000 
A)  $200,000 
B)  $160,000 
C)  $40,000 
D)  $20,000 
E)  $10,000

Question 5

There is added protection for whistle-blowers who report violations of the Sarbanes-Oxley Act.

Accepted Answer

A) True 
 B)False

Question 6

The number of times a firm sells and replaces its merchandise inventory in one year is known as its

Accepted Answer

A)  cost of goods sold. 
B)  gross profit on operations. 
C)  inventory turnover. 
D)  accounts receivable turnover. 
E)  net purchases. 
A)  cost of goods sold. 
B)  gross profit on operations. 
C)  inventory turnover. 
D)  accounts receivable turnover. 
E)  net purchases.

Question 7

The total dollar amount of all goods and services sold during the accounting period is called net sales.

Accepted Answer

A) True 
 B)False

Question 8

The return on sales ratio indicates how effectively a firm is transforming its sales into profits.

Accepted Answer

A) True 
 B)False

Question 9

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. Which of the following represents a key component of the Sarbanes-Oxley Act relating to consulting services?

Accepted Answer

A)  A public corporation must change its lead consulting firm every five years. 
B)  Accounting firms are prohibited from providing many types of consulting services to the companies they audit. 
C)  Accounting firms that report violations of the Sarbanes-Oxley Act must be banned from consulting for five years. 
D)  The SEC is required to establish a full-time five-member federal oversight board that will police the consulting industry. 
E)  Consultants must maintain financial documents and audit work papers for fifteen years. 
A)  A public corporation must change its lead consulting firm every five years. 
B)  Accounting firms are prohibited from providing many types of consulting services to the companies they audit. 
C)  Accounting firms that report violations of the Sarbanes-Oxley Act must be banned from consulting for five years. 
D)  The SEC is required to establish a full-time five-member federal oversight board that will police the consulting industry. 
E)  Consultants must maintain financial documents and audit work papers for fifteen years.

Question 10

Operations managers need management information in all of the following areas except

Accepted Answer

A)  the cost of production. 
B)  current inventory levels. 
C)  availability of resources. 
D)  future capitalization needs. 
E)  present and future sales levels. 
A)  the cost of production. 
B)  current inventory levels. 
C)  availability of resources. 
D)  future capitalization needs. 
E)  present and future sales levels.

Question 11

The current ratio is calculated by dividing

Accepted Answer

A)  current assets by owners' equity. 
B)  current assets by current liabilities. 
C)  income by operating expenses. 
D)  net sales after taxes by net sales. 
E)  accounts receivable by inventory turnover. 
A)  current assets by owners' equity. 
B)  current assets by current liabilities. 
C)  income by operating expenses. 
D)  net sales after taxes by net sales. 
E)  accounts receivable by inventory turnover.

Question 12

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. One of RCR's clients is ABC Electronics. RCR develops ABC Electronics' statements and reports for ABC's stockholders, financial analysts, and bankers. These services can be classified as which of the following?

Accepted Answer

A)  Non-accounting services 
B)  Tax accounting 
C)  Financial accounting 
D)  Managerial accounting 
E)  Cost accounting 
A)  Non-accounting services 
B)  Tax accounting 
C)  Financial accounting 
D)  Managerial accounting 
E)  Cost accounting

Question 13

The process of spreading the cost of a fixed asset over the asset's useful life is called

Accepted Answer

A)  expensing. 
B)  depreciation. 
C)  apportioning. 
D)  crediting. 
E)  distributing. 
A)  expensing. 
B)  depreciation. 
C)  apportioning. 
D)  crediting. 
E)  distributing.

Question 14

In theory, if Linda has complete and accurate information about a business decision she has to make, there is

Accepted Answer

A)  very little risk. 
B)  no risk at all. 
C)  very high risk. 
D)  moderate risk. 
E)  more risk than if information is not known. 
A)  very little risk. 
B)  no risk at all. 
C)  very high risk. 
D)  moderate risk. 
E)  more risk than if information is not known.

Question 15

Television sets that Best Buy owns for selling to its customers are classified as

Accepted Answer

A)  equipment. 
B)  machinery. 
C)  receivables. 
D)  merchandise inventory. 
E)  prepaid merchandise. 
A)  equipment. 
B)  machinery. 
C)  receivables. 
D)  merchandise inventory. 
E)  prepaid merchandise.

Question 16

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. If the owners were interested in obtaining the company's current ratio, Christine should do which of the following?

Accepted Answer

A)  Divide current assets by current liabilities 
B)  Multiply current assets by current liabilities 
C)  Divide net income after taxes by net sales 
D)  Get the difference between current assets and current liabilities 
E)  Subtract inventory from current assets 
A)  Divide current assets by current liabilities 
B)  Multiply current assets by current liabilities 
C)  Divide net income after taxes by net sales 
D)  Get the difference between current assets and current liabilities 
E)  Subtract inventory from current assets

Question 17

According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000. Which of the following statements is true?

Accepted Answer

A)  The owners' equity is $155,000. 
B)  The owners' equity is $93,000. 
C)  The firm's current assets are $62,000. 
D)  The firm's current liabilities are $24,000. 
E)  The firm's accounting equation won't balance. 
A)  The owners' equity is $155,000. 
B)  The owners' equity is $93,000. 
C)  The firm's current assets are $62,000. 
D)  The firm's current liabilities are $24,000. 
E)  The firm's accounting equation won't balance.

Question 18

Kim's Copy Shop is in the process of organizing its assets in the appropriate order. The manager asks you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable. You list ____ first and ____ last.

Accepted Answer

A)  merchandise inventory; notes receivable 
B)  accounts receivable; equipment 
C)  notes receivable; accounts receivable 
D)  equipment; accounts receivable 
E)  cash; equipment 
A)  merchandise inventory; notes receivable 
B)  accounts receivable; equipment 
C)  notes receivable; accounts receivable 
D)  equipment; accounts receivable 
E)  cash; equipment

Question 19

An airplane that FedEx owns and uses to deliver packages is a(n) ____ of FedEx.

Accepted Answer

A)  liability 
B)  asset 
C)  owners' equity 
D)  expense 
E)  revenue 
A)  liability 
B)  asset 
C)  owners' equity 
D)  expense 
E)  revenue

Question 20

A database is a single collection of data stored in one space that can be used by people throughout the organization to make decisions.

Accepted Answer

A) True 
 B)False

Exam 17: Using Management and Accounting Information

Would you expect the information needs of top managers to differ from those of middle- and lower-level managers? Explain your answer.

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

The cost of goods sold divided by the average inventory equals the

During the year Comer, Inc., had $200,000 in goods available for sale. At the end of the accounting period it had an ending inventory of $40,000. This reveals that it had sold all but ____ worth of the available goods.

There is added protection for whistle-blowers who report violations of the Sarbanes-Oxley Act.

The number of times a firm sells and replaces its merchandise inventory in one year is known as its

The total dollar amount of all goods and services sold during the accounting period is called net sales.

The return on sales ratio indicates how effectively a firm is transforming its sales into profits.

Operations managers need management information in all of the following areas except

The current ratio is calculated by dividing

The process of spreading the cost of a fixed asset over the asset's useful life is called

In theory, if Linda has complete and accurate information about a business decision she has to make, there is

Television sets that Best Buy owns for selling to its customers are classified as

According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000. Which of the following statements is true?

Kim's Copy Shop is in the process of organizing its assets in the appropriate order. The manager asks you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable. You list ____ first and ____ last.

An airplane that FedEx owns and uses to deliver packages is a(n) ____ of FedEx.

A database is a single collection of data stored in one space that can be used by people throughout the organization to make decisions.

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

Filters

Kim's Copy Shop is in the process of organizing its assets in the appropriate order. The manager asks you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable. You list first and last.