Question 1

Rents,salaries,utilities and insurance are examples of operating expenses.

Accepted Answer

A) True 
 B)False

Question 2

As a certified public accountant,you would be working in the area of managerial accounting.

Accepted Answer

A) True 
 B)False

Question 3

As a certified public accountant (CPA),Kay might become involved in helping clients select appropriate accounting computer software for their firm.

Accepted Answer

A) True 
 B)False

Question 4

The two major classes of operating expenses are current expenses and long-term expenses.

Accepted Answer

A) True 
 B)False

Question 5

In an effort to maintain a competitive advantage,firms do not share accounting information with people outside of the firm.

Accepted Answer

A) True 
 B)False

Question 6

The fundamental accounting equation states: Assets = _________.

Accepted Answer

A) liabilities minus owners' equity 
B) liabilities plus receivables 
C) payables plus cash equivalents 
D) liabilities plus owners' equity 
A) liabilities minus owners' equity 
B) liabilities plus receivables 
C) payables plus cash equivalents 
D) liabilities plus owners' equity

Question 7

Jasmine is categorizing journal entries in order to post to the _______.

Accepted Answer

A) income statement 
B) balance sheet 
C) working papers 
D) ledger 
A) income statement 
B) balance sheet 
C) working papers 
D) ledger

Question 8

At this point in time,Bark Three Times Pet Store's balance sheet shows $100,000 in assets and $90,000 in liabilities.The company's accounting system will show the owners' equity as $190,000.

Accepted Answer

A) True 
 B)False

Question 9

Important provisions of the Sarbanes-Oxley Act:

Accepted Answer

A) Approve corporate loans to directors of the company. 
B) Encourage the destruction of financial documents. 
C) Require the CEO and CFO of corporations to certify the accuracy of financial reports. 
D) Encourage outside CPA firms to deliver several services to their clients,including auditing services and consulting services. 
A) Approve corporate loans to directors of the company. 
B) Encourage the destruction of financial documents. 
C) Require the CEO and CFO of corporations to certify the accuracy of financial reports. 
D) Encourage outside CPA firms to deliver several services to their clients,including auditing services and consulting services.

Question 10

Good decisions are based on good information.Organizations need accounting-to provide good financial information.

Accepted Answer

A) True 
 B)False

Question 11

Jamal is an accountant employed full-time by The Barkley Company.Jamal is an example of a public accountant.

Accepted Answer

A) True 
 B)False

Question 12

The _____ shows the assets,liabilities,and owners' equity of a firm,at a specific point in time.

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of cash flows 
D) trial balance 
A) income statement 
B) balance sheet 
C) statement of cash flows 
D) trial balance

Question 13

Government organizations such as the IRS and other government regulatory agencies are interested in a firm's accounting information in order to help the firm strategize about ways to cut costs in order to minimize net income before taxes.

Accepted Answer

A) True 
 B)False

Question 14

__________ involves the review and evaluation of the records that are used to prepare the organization's financial statements.

Accepted Answer

A) Auditing 
B) Financial accounting 
C) Managerial accounting 
D) Certified bookkeeping 
A) Auditing 
B) Financial accounting 
C) Managerial accounting 
D) Certified bookkeeping

Question 15

Cash flow difficulties are unlikely for a firm that is profitable.

Accepted Answer

A) True 
 B)False

Question 16

During periods of rising prices,firms that want to report more attractive profits would tend to favor the FIFO technique of inventory valuation.

Accepted Answer

A) True 
 B)False

Question 17

Financial accounting is used to provide information and analysis managers within the organization can use to assist them in decision making.

Accepted Answer

A) True 
 B)False

Question 18

Information contained in a firm's annual report largely represents work done by managerial accountants.

Accepted Answer

A) True 
 B)False

Question 19

The key financial statements are the balance sheet,the income statement,and the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 20

Tyler works as an accountant for a mid-sized retail store.He has just completed a trial balance that resulted in no unexpected problems.Tyler's next task is likely to be:

Accepted Answer

A) Conducting the full audit. 
B) Preparing a tax return for the company. 
C) Preparing the store's balance sheet and other major financial statements. 
D) Presenting the trial balance to the company owners. 
A) Conducting the full audit. 
B) Preparing a tax return for the company. 
C) Preparing the store's balance sheet and other major financial statements. 
D) Presenting the trial balance to the company owners.

Exam 17: Understanding Accounting and Financial Information

Rents,salaries,utilities and insurance are examples of operating expenses.

As a certified public accountant,you would be working in the area of managerial accounting.

As a certified public accountant (CPA),Kay might become involved in helping clients select appropriate accounting computer software for their firm.

The two major classes of operating expenses are current expenses and long-term expenses.

In an effort to maintain a competitive advantage,firms do not share accounting information with people outside of the firm.

The fundamental accounting equation states: Assets = _________.

Jasmine is categorizing journal entries in order to post to the _______.

At this point in time,Bark Three Times Pet Store's balance sheet shows $100,000 in assets and $90,000 in liabilities.The company's accounting system will show the owners' equity as $190,000.

Important provisions of the Sarbanes-Oxley Act:

Good decisions are based on good information.Organizations need accounting-to provide good financial information.

Jamal is an accountant employed full-time by The Barkley Company.Jamal is an example of a public accountant.

The _____ shows the assets,liabilities,and owners' equity of a firm,at a specific point in time.

Government organizations such as the IRS and other government regulatory agencies are interested in a firm's accounting information in order to help the firm strategize about ways to cut costs in order to minimize net income before taxes.

__________ involves the review and evaluation of the records that are used to prepare the organization's financial statements.

Cash flow difficulties are unlikely for a firm that is profitable.

During periods of rising prices,firms that want to report more attractive profits would tend to favor the FIFO technique of inventory valuation.

Financial accounting is used to provide information and analysis managers within the organization can use to assist them in decision making.

Information contained in a firm's annual report largely represents work done by managerial accountants.

The key financial statements are the balance sheet,the income statement,and the statement of cash flows.

Tyler works as an accountant for a mid-sized retail store.He has just completed a trial balance that resulted in no unexpected problems.Tyler's next task is likely to be:

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money,financial Institutions,and the Federal Reserve

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

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