Question 1

The ease with which an asset can be converted into cash is referred to as its

Accepted Answer

A) liquidity. 
B) profitability. 
C) solvency. 
D) convertibility. 
E) capitalization capacity. 
A) liquidity. 
B) profitability. 
C) solvency. 
D) convertibility. 
E) capitalization capacity. A

Question 2

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 correct?

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. B

Question 3

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

Accepted Answer

A) Cash flows from operating activities 
B) Cash flows from financing activities 
C) Business cash flows 
D) Non-business-related cash flows 
E) Cash flows from investing activities 
A) Cash flows from operating activities 
B) Cash flows from financing activities 
C) Business cash flows 
D) Non-business-related cash flows 
E) Cash flows from investing activities A

Question 4

A public corporation must change its lead auditing firm

Accepted Answer

A) every year. 
B) every two years. 
C) every five years. 
D) every ten years. 
E) whenever it wants to. 
A) every year. 
B) every two years. 
C) every five years. 
D) every ten years. 
E) whenever it wants to.

Question 5

Knowledge management is a firm's procedures for using computer software to solve business problems.

Accepted Answer

A) True 
 B)False

Question 6

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

Accepted Answer

A) statistic 
B) comparative number 
C) current ratio 
D) financial ratio 
E) formula 
A) statistic 
B) comparative number 
C) current ratio 
D) financial ratio 
E) formula

Question 7

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank. This debt owed to the bank is a(n)

Accepted Answer

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

Question 8

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. What does GAAP stand for?

Accepted Answer

A) Generally accepted accounting principles 
B) Generally accepted auditing principles 
C) Generalized accounting and auditing principles 
D) Generic accounting alternative practices 
E) General administrative accounting practices 
A) Generally accepted accounting principles 
B) Generally accepted auditing principles 
C) Generalized accounting and auditing principles 
D) Generic accounting alternative practices 
E) General administrative accounting practices

Question 9

When Betty Tran prepared a personal income statement, the remainder or residual value is called

Accepted Answer

A) net asset total. 
B) total assets. 
C) total revenues. 
D) retained earnings. 
E) cash surplus. 
A) net asset total. 
B) total assets. 
C) total revenues. 
D) retained earnings. 
E) cash surplus.

Question 10

The statement of financial position is also known as the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

Because of the Sarbanes-Oxley Act, accountants must maintain financial documents and audit work for

Accepted Answer

A) six months. 
B) one year. 
C) three years. 
D) five years. 
E) ten years. 
A) six months. 
B) one year. 
C) three years. 
D) five years. 
E) ten years.

Question 12

If you are taking a common sense approach to evaluating a firm's accounting information, which of the following would not be something that you would hope to see?

Accepted Answer

A) Financial statements audited by an outside source 
B) Remembering that a balance sheet is only a snapshot in time 
C) Paying great attention to current profit and not worrying about the future 
D) Strategies to reduce operating expenses 
E) How the company manages its cash flow 
A) Financial statements audited by an outside source 
B) Remembering that a balance sheet is only a snapshot in time 
C) Paying great attention to current profit and not worrying about the future 
D) Strategies to reduce operating expenses 
E) How the company manages its cash flow

Question 13

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 14

If total liabilities were subtracted from total assets, the residual value would be

Accepted Answer

A) revenues. 
B) owners' equity. 
C) net income. 
D) working capital. 
E) expenses. 
A) revenues. 
B) owners' equity. 
C) net income. 
D) working capital. 
E) expenses.

Question 15

Net income is the profit earned (or the loss suffered) by a firm during an accounting period after the cost of goods sold and all expenses have been deducted from revenues.

Accepted Answer

A) True 
 B)False

Question 16

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 17

If you wanted to evaluate the financial condition of Target Stores, a leading discount chain, you would most likely compare its financial ratios to ____ ratios.

Accepted Answer

A) Walmart's 
B) JCPenney's 
C) General Electric's 
D) small retailer industry's average 
E) Target in future years 
A) Walmart's 
B) JCPenney's 
C) General Electric's 
D) small retailer industry's average 
E) Target in future years

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Debts that are to be repaid in two years are referred to as

Accepted Answer

A) expenses. 
B) current assets. 
C) long-term liabilities. 
D) fixed assets. 
E) current liabilities. 
A) expenses. 
B) current assets. 
C) long-term liabilities. 
D) fixed assets. 
E) current liabilities.

Question 20

Individuals or organizations outside of a company will never have the need or desire to view information on another company's finances.

Accepted Answer

A) True 
 B)False

The ease with which an asset can be converted into cash is referred to as its

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 correct?

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

A public corporation must change its lead auditing firm

Knowledge management is a firm's procedures for using computer software to solve business problems.

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank. This debt owed to the bank is a(n)

When Betty Tran prepared a personal income statement, the remainder or residual value is called

The statement of financial position is also known as the balance sheet.

Because of the Sarbanes-Oxley Act, accountants must maintain financial documents and audit work for

If you are taking a common sense approach to evaluating a firm's accounting information, which of the following would not be something that you would hope to see?

If total liabilities were subtracted from total assets, the residual value would be

Net income is the profit earned (or the loss suffered) by a firm during an accounting period after the cost of goods sold and all expenses have been deducted from revenues.

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

If you wanted to evaluate the financial condition of Target Stores, a leading discount chain, you would most likely compare its financial ratios to ____ ratios.

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

Debts that are to be repaid in two years are referred to as

Individuals or organizations outside of a company will never have the need or desire to view information on another company's finances.

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

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

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Social Media and E-Business

Mastering Financial Management

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Exam 15: Using Management Information Systems and Accounting Information

The ease with which an asset can be converted into cash is referred to as its

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 correct?

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

A public corporation must change its lead auditing firm

Knowledge management is a firm's procedures for using computer software to solve business problems.

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank. This debt owed to the bank is a(n)

When Betty Tran prepared a personal income statement, the remainder or residual value is called

The statement of financial position is also known as the balance sheet.

Because of the Sarbanes-Oxley Act, accountants must maintain financial documents and audit work for

If you are taking a common sense approach to evaluating a firm's accounting information, which of the following would not be something that you would hope to see?

If total liabilities were subtracted from total assets, the residual value would be

Net income is the profit earned (or the loss suffered) by a firm during an accounting period after the cost of goods sold and all expenses have been deducted from revenues.

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

If you wanted to evaluate the financial condition of Target Stores, a leading discount chain, you would most likely compare its financial ratios to ____ ratios.

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

Debts that are to be repaid in two years are referred to as

Individuals or organizations outside of a company will never have the need or desire to view information on another company's finances.

Exploring the World of Business and Economics

Being Ethical and Socially Responsible

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

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Social Media and E-Business

Mastering Financial Management

Filters