Exam 7: Accounting: Decision Making by the Numbers

If the auditor does not find any problems with the way a firm's financial statements were prepared and presented, the report will offer an adverse opinion.

Which of the following would be listed in the owners' equity section of a balance sheet?

Business expenses are available resources that stakeholders control.

Strong financial performance would help employees make their case for nice pay raises and hefty bonuses.

Ralph owns some stock in the Lottadoe Corporation, and wants to know whether this company earned a profit over the most recent year. This information would be available on the company's balance sheet.

Which of the following are assets?

Accounting is a system for recognizing, recording, organizing, analyzing, summarizing, and reporting information about the financial transactions that affect an organization.

Which of the following is a system for recognizing, recording, organizing, summarizing, analyzing, and reporting information about the financial transactions that affect an organization?

The accounting equation shows us that the value of the firm's assets must equal the value of which of the following?

The accounting entity approach is an accounting method that recognizes revenue when it is earned and matches expenses to the revenues produced.

Two firms in the same industry are the same size and have very similar real-world financial results. Which of the following describes the profitability ratios of these firms?

Which statement describes the accounting profession during the first few years of the 21st century?

Which ratio compares profit to some measure of resources invested?

The finance managers collected the following information for their firm: Total Assets = $60,000; Current Assets = $10,000; Long-term Liabilities = $100,000; Current Liabilities = $8000. What is the current ratio?

The statement of cash flows shows the cash flowing in and out of the firm from three types of activities: operations, investing, and financing. It also shows the net increase or decrease in cash from all three sources and the total amount of cash on hand at the end of the period.

Which item would be listed first on the income statement?

The amount of cash at the end of the period, as reflected on the statement of cash flows, should match which of the following?

Which set of statements comprises the major output of financial accounting?

If a firm's assets = $6000 and its liabilities = $3500, what is owners' equity?

Financial accounting is the branch of accounting that prepares financial statements for use by owners, creditors, suppliers, and other stakeholders.