Question 1

All of the following are assets EXCEPT _____.

Accepted Answer

A) inventory 
B) cash 
C) patents 
D) bank loans 
A) inventory 
B) cash 
C) patents 
D) bank loans D

Question 2

Return on equity is a profitability ratio.

Accepted Answer

A) True 
 B)False  True

Question 3

When examining a statement of cash flows,investors obtain relevant information about a firm's cash receipts and payments for its operations,investments,and financing during an accounting period.

Accepted Answer

A) True 
 B)False  True

Question 4

The _____ was created by the Sarbanes-Oxley Act of 2002.

Accepted Answer

A) Securities & Exchange Commission 
B) Public Accounting Oversight Board 
C) GAAP 
D) FASB 
A) Securities & Exchange Commission 
B) Public Accounting Oversight Board 
C) GAAP 
D) FASB

Question 5

If a firm has a current ratio of 2.5,it means that for every $2.50 in _____ it has $1.00 in _____.

Accepted Answer

A) current assets;current liabilities 
B) total assets;total liabilities 
C) current assets;total liabilities 
D) total assets;current liabilities 
A) current assets;current liabilities 
B) total assets;total liabilities 
C) current assets;total liabilities 
D) total assets;current liabilities

Question 6

Complete the following using the terms listed.
-The _____ created the Public Accounting Oversight Board to handle well-known cases of accounting fraud and respond to questions about the independence of auditors.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 7

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Walker is most interested in using this information _____.

Accepted Answer

A) to plan and control daily operations 
B) in contract negotiations 
C) to make an investment decision and estimate its future returns 
D) to evaluate financial soundness of potential clients 
A) to plan and control daily operations 
B) in contract negotiations 
C) to make an investment decision and estimate its future returns 
D) to evaluate financial soundness of potential clients

Question 8

Complete the following using the terms listed.
-The _____ is primarily responsible for evaluating,setting,or modifying the generally accepted accounting principles.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 9

Complete the following using the terms listed.
-The basic relationship that states assets equal liabilities plus owners' equity is called the _____.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 10

Complete the following using the terms listed.
-In the United States,the Financial Accounting Standards Board (FASB)is primarily responsible for evaluating,setting,or modifying _____.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 11

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues,operating expenses,and cash receipts and disbursements.Shane wants to create a(n)_____.

Accepted Answer

A) sales forecast 
B) statement of cash flows 
C) income statement 
D) budget 
A) sales forecast 
B) statement of cash flows 
C) income statement 
D) budget

Question 12

The Securities and Exchange Commission is the chief federal regulator of financial markets and the accounting industry.

Accepted Answer

A) True 
 B)False

Question 13

Accountants play a role in all three business activities: financing,investing,and operating.

Accepted Answer

A) True 
 B)False

Question 14

Complete the following using the terms listed.
-The _____ was established to promote worldwide consistency in financial reporting practices.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 15

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an accounting software?

Accepted Answer

A) Linux 
B) Windows Vista 
C) Microsoft Azure 
D) NetSuite 
A) Linux 
B) Windows Vista 
C) Microsoft Azure 
D) NetSuite

Question 17

Haley is a corporate certified public accountant (CPA)working on a new budget.When she lists the company's liabilities,which of the following will she include?

Accepted Answer

A) Computer software 
B) Owners' equity 
C) Marketable securities 
D) Employees' wages and salaries 
A) Computer software 
B) Owners' equity 
C) Marketable securities 
D) Employees' wages and salaries

Question 18

Complete the following using the terms listed.
-A financial record of a company's revenues,expenses,and profits over a specific period of time is called the _____.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Sarbanes-Oxley Act (SOX)
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
R)management accountant

Question 19

Profitability ratios measure a firm's ability to meet its short-term obligations.

Accepted Answer

A) True 
 B)False

Question 20

The balance sheet is based on the accounting equation.

Accepted Answer

A) True 
 B)False

All of the following are assets EXCEPT _____.

Return on equity is a profitability ratio.

When examining a statement of cash flows,investors obtain relevant information about a firm's cash receipts and payments for its operations,investments,and financing during an accounting period.

The _____ was created by the Sarbanes-Oxley Act of 2002.

If a firm has a current ratio of 2.5,it means that for every $2.50 in _ it has $1.00 in _.

Complete the following using the terms listed. -The _____ created the Public Accounting Oversight Board to handle well-known cases of accounting fraud and respond to questions about the independence of auditors.

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Walker is most interested in using this information _____.

Complete the following using the terms listed. -The _____ is primarily responsible for evaluating,setting,or modifying the generally accepted accounting principles.

Complete the following using the terms listed. -The basic relationship that states assets equal liabilities plus owners' equity is called the _____.

Complete the following using the terms listed. -In the United States,the Financial Accounting Standards Board (FASB)is primarily responsible for evaluating,setting,or modifying _____.

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues,operating expenses,and cash receipts and disbursements.Shane wants to create a(n)_____.

The Securities and Exchange Commission is the chief federal regulator of financial markets and the accounting industry.

Accountants play a role in all three business activities: financing,investing,and operating.

Complete the following using the terms listed. -The _____ was established to promote worldwide consistency in financial reporting practices.

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Which of the following is an accounting software?

Haley is a corporate certified public accountant (CPA)working on a new budget.When she lists the company's liabilities,which of the following will she include?

Complete the following using the terms listed. -A financial record of a company's revenues,expenses,and profits over a specific period of time is called the _____.

Profitability ratios measure a firm's ability to meet its short-term obligations.

The balance sheet is based on the accounting equation.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Trends in E-Commerce

Filters

Exam 15: Understanding Accounting and Financial Statements

All of the following are assets EXCEPT _____.

Return on equity is a profitability ratio.

When examining a statement of cash flows,investors obtain relevant information about a firm's cash receipts and payments for its operations,investments,and financing during an accounting period.

The _____ was created by the Sarbanes-Oxley Act of 2002.

If a firm has a current ratio of 2.5,it means that for every $2.50 in _____ it has $1.00 in _____.

Complete the following using the terms listed. -The _____ created the Public Accounting Oversight Board to handle well-known cases of accounting fraud and respond to questions about the independence of auditors.

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Walker is most interested in using this information _____.

Complete the following using the terms listed. -The _____ is primarily responsible for evaluating,setting,or modifying the generally accepted accounting principles.

Complete the following using the terms listed. -The basic relationship that states assets equal liabilities plus owners' equity is called the _____.

Complete the following using the terms listed. -In the United States,the Financial Accounting Standards Board (FASB)is primarily responsible for evaluating,setting,or modifying _____.

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues,operating expenses,and cash receipts and disbursements.Shane wants to create a(n)_____.

The Securities and Exchange Commission is the chief federal regulator of financial markets and the accounting industry.

Accountants play a role in all three business activities: financing,investing,and operating.

Complete the following using the terms listed. -The _____ was established to promote worldwide consistency in financial reporting practices.

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Which of the following is an accounting software?

Haley is a corporate certified public accountant (CPA)working on a new budget.When she lists the company's liabilities,which of the following will she include?

Complete the following using the terms listed. -A financial record of a company's revenues,expenses,and profits over a specific period of time is called the _____.

Profitability ratios measure a firm's ability to meet its short-term obligations.

The balance sheet is based on the accounting equation.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management,leadership,and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Trends in E-Commerce

Filters

If a firm has a current ratio of 2.5,it means that for every $2.50 in _ it has $1.00 in _.