Question 1

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

Accepted Answer

A)  MIS. 
B)  data processing. 
C)  transactions. 
D)  information processing. 
E)  implementation. 
A)  MIS. 
B)  data processing. 
C)  transactions. 
D)  information processing. 
E)  implementation.

Question 2

All of the following are sections of the income statement for a business except

Accepted Answer

A)  cost of goods sold. 
B)  liabilities. 
C)  revenues. 
D)  operating expenses. 
E)  net income or loss. 
A)  cost of goods sold. 
B)  liabilities. 
C)  revenues. 
D)  operating expenses. 
E)  net income or loss.

Question 3

Jane Cook started a small manufacturing firm two years ago. Now, after two years, she decides it is time to hire an accountant to work in the office and process all her financial data. This accountant will be a

Accepted Answer

A)  certified auditor. 
B)  certified bookkeeper. 
C)  managerial bookkeeping clerk. 
D)  private accountant. 
E)  public accountant. 
A)  certified auditor. 
B)  certified bookkeeper. 
C)  managerial bookkeeping clerk. 
D)  private accountant. 
E)  public accountant.

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. The cost of goods sold by Comer was therefore

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

The purpose of an audit is to ensure that financial statements have been prepared according to

Accepted Answer

A)  the particular company's standards. 
B)  the industry's standards. 
C)  generally accepted accounting principles. 
D)  international accounting standards. 
E)  the standards of certified public accountants. 
A)  the particular company's standards. 
B)  the industry's standards. 
C)  generally accepted accounting principles. 
D)  international accounting standards. 
E)  the standards of certified public accountants.

Question 6

Assets = liabilities + owners' equity is the equation for information reported on the

Accepted Answer

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

Question 7

A(n) ____ is a summary of a firm's revenues and expenses during a specified accounting period, such as a year.

Accepted Answer

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

Question 8

A firm's MIS data bank should include all past and current data that may be useful in managing the firm.

Accepted Answer

A) True 
 B)False

Question 9

Walmart takes its net sales and subtracts the cost of goods sold during the previous period. The result is Walmart's

Accepted Answer

A)  gross sales. 
B)  net income. 
C)  gross profit. 
D)  net margin. 
E)  net purchases. 
A)  gross sales. 
B)  net income. 
C)  gross profit. 
D)  net margin. 
E)  net purchases.

Question 10

The cash that Coca-Cola receives from providing customers with Coke and other soft drinks and juices would appear in the ____ section of the statement of cash flows.

Accepted Answer

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

Question 11

Dave Murray's Pontiac dealership has an inventory turnover of 5. What does this figure mean?

Accepted Answer

A)  The average value of Dave's inventory is five times his sales. 
B)  For every $1 Dave spends on inventory, he reaps $5 in sales. 
C)  Dave's beginning inventory is five times his ending inventory. 
D)  Dave's average inventory is five times greater than his cost of goods sold. 
E)  Dave sells and replaces his merchandise five times each year. 
A)  The average value of Dave's inventory is five times his sales. 
B)  For every $1 Dave spends on inventory, he reaps $5 in sales. 
C)  Dave's beginning inventory is five times his ending inventory. 
D)  Dave's average inventory is five times greater than his cost of goods sold. 
E)  Dave sells and replaces his merchandise five times each year.

Question 12

Lutex Corporation began its accounting period with a merchandise inventory (beginning inventory) that cost $10,000. During the period, it purchased for resale merchandise with a retail value of $100,000. With purchase discounts, it paid only $80,000 for this merchandise. Thus, during this period, Lutex had ____ in goods available for sale.

Accepted Answer

A)  $180,000 
B)  $70,000 
C)  $80,000 
D)  $90,000 
E)  $190,000 
A)  $180,000 
B)  $70,000 
C)  $80,000 
D)  $90,000 
E)  $190,000

Question 13

A reduction in price that is offered to customers who accept slightly damaged or soiled merchandise is referred to as

Accepted Answer

A)  a sales discount. 
B)  cost of goods sold. 
C)  a sales allowance. 
D)  an operating expense. 
E)  a sales return. 
A)  a sales discount. 
B)  cost of goods sold. 
C)  a sales allowance. 
D)  an operating expense. 
E)  a sales return.

Question 14

For a corporation, the owners' equity amount is the total value of stock minus the retained earnings that have accumulated to date.

Accepted Answer

A) True 
 B)False

Question 15

The cost of goods sold equals beginning inventory plus net purchases minus ending inventory.

Accepted Answer

A) True 
 B)False

Question 16

Randy is shopping for an all-in-one printer/copier/scanner/fax machine. He decides to purchase a certain model because it has the highest price, so Randy assumes it must have the highest quality. Randy has applied a(n) ____ in making his decision.

Accepted Answer

A)  data structure 
B)  reference price 
C)  database 
D)  information rule 
E)  qualitative analysis 
A)  data structure 
B)  reference price 
C)  database 
D)  information rule 
E)  qualitative analysis

Question 17

Briefly describe each of the four parts of a typical business report.

Accepted Answer

A typical business report is generally s

Question 18

Dr. Ted Walker runs a chiropractic clinic. He typically bills his customers for services he performs and gives them about 30 days to make the payments. These amounts of money that his customers owe are called

Accepted Answer

A)  allowances for doubtful accounts. 
B)  prepaid expenses. 
C)  unearned revenue. 
D)  intangible assets. 
E)  accounts receivable. 
A)  allowances for doubtful accounts. 
B)  prepaid expenses. 
C)  unearned revenue. 
D)  intangible assets. 
E)  accounts receivable.

Question 19

Often, the ones who are hurt when corporations "cook" the books are the firm's employees, investors, lenders, and suppliers.

Accepted Answer

A) True 
 B)False

Question 20

Dividing current assets by current liabilities gives the current ratio.

Accepted Answer

A) True 
 B)False

Exam 17: Using Management and Accounting Information

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

All of the following are sections of the income statement for a business except

Jane Cook started a small manufacturing firm two years ago. Now, after two years, she decides it is time to hire an accountant to work in the office and process all her financial data. This accountant will be a

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. The cost of goods sold by Comer was therefore

The purpose of an audit is to ensure that financial statements have been prepared according to

Assets = liabilities + owners' equity is the equation for information reported on the

A(n) ____ is a summary of a firm's revenues and expenses during a specified accounting period, such as a year.

A firm's MIS data bank should include all past and current data that may be useful in managing the firm.

Walmart takes its net sales and subtracts the cost of goods sold during the previous period. The result is Walmart's

The cash that Coca-Cola receives from providing customers with Coke and other soft drinks and juices would appear in the ____ section of the statement of cash flows.

Dave Murray's Pontiac dealership has an inventory turnover of 5. What does this figure mean?

A reduction in price that is offered to customers who accept slightly damaged or soiled merchandise is referred to as

For a corporation, the owners' equity amount is the total value of stock minus the retained earnings that have accumulated to date.

The cost of goods sold equals beginning inventory plus net purchases minus ending inventory.

Randy is shopping for an all-in-one printer/copier/scanner/fax machine. He decides to purchase a certain model because it has the highest price, so Randy assumes it must have the highest quality. Randy has applied a(n) ____ in making his decision.

Briefly describe each of the four parts of a typical business report.

Dr. Ted Walker runs a chiropractic clinic. He typically bills his customers for services he performs and gives them about 30 days to make the payments. These amounts of money that his customers owe are called

Often, the ones who are hurt when corporations "cook" the books are the firm's employees, investors, lenders, and suppliers.

Dividing current assets by current liabilities gives the current ratio.

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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