Question 1

What is inventory turnover and how is it calculated? Why is it important for a manager to track this ratio?

Accepted Answer

Inventory turnover is a financial ratio

Question 2

The balance sheet is composed of

Accepted Answer

A) owners' equity, assets, and liabilities. 
B) expenses, revenue, and net income. 
C) revenue, expenses, and owners' equity. 
D) assets, expenses, and net income. 
E) assets, liabilities, and revenues. 
A) owners' equity, assets, and liabilities. 
B) expenses, revenue, and net income. 
C) revenue, expenses, and owners' equity. 
D) assets, expenses, and net income. 
E) assets, liabilities, and revenues.

Question 3

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 4

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Accepted Answer

A) True 
 B)False

Question 5

Owners' equity is the dollar value that remains after the total liabilities of a business are subtracted from its total assets.

Accepted Answer

A) True 
 B)False

Question 6

How would it be easier to determine if a firm made or lost money last year-by looking at the balance sheet or by looking at the income statement? Support your answer by explaining in general terms what accounts a balance sheet lists and what accounts an income statement lists.

Accepted Answer

The quickest way to determine if a firm

Question 7

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 8

​The total dollar amount of all goods and services sold during the accounting period is the

Accepted Answer

A) ​gross sales. 
B) ​net sales. 
C) ​revenues. 
D) ​income. 
A) ​gross sales. 
B) ​net sales. 
C) ​revenues. 
D) ​income.

Question 9

The value of goods on hand for sale to customers is called

Accepted Answer

A) sales. 
B) merchandise inventory. 
C) cost of goods sold. 
D) prepaid expenses. 
E) operating expenses. 
A) sales. 
B) merchandise inventory. 
C) cost of goods sold. 
D) prepaid expenses. 
E) operating expenses.

Question 10

If a company has $50,000 of assets, which of the following could be true?

Accepted Answer

A) It has −$50,000 in stockholders' equity and $100,000 in liabilities. 
B) The company has fewer assets than it does liabilities. 
C) It has $30,000 in liabilities and $80,000 in owners' equity. 
D) The company has more owners' equity than assets. 
E) It has $23,000 in owners' equity and $27,000 in liabilities. 
A) It has −$50,000 in stockholders' equity and $100,000 in liabilities. 
B) The company has fewer assets than it does liabilities. 
C) It has $30,000 in liabilities and $80,000 in owners' equity. 
D) The company has more owners' equity than assets. 
E) It has $23,000 in owners' equity and $27,000 in liabilities.

Question 11

Since furniture and store equipment for Rosalind's Boutique will be held or used for a period longer than one year, they are considered

Accepted Answer

A) fixed assets. 
B) owners' equity. 
C) revenue. 
D) current assets. 
E) prepaid expenses. 
A) fixed assets. 
B) owners' equity. 
C) revenue. 
D) current assets. 
E) prepaid expenses.

Question 12

According to the accounting equation, cash, inventory, equipment, and real estate are classified as owners' equity.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best describes the organization of a statement of cash flows?

Accepted Answer

A) Assets = liabilities + stockholders' equity 
B) Revenues − expenses = net income 
C) Operating, investing, and financing cash flows 
D) Cash in, cash out 
E) Payments − receipts = cash 
A) Assets = liabilities + stockholders' equity 
B) Revenues − expenses = net income 
C) Operating, investing, and financing cash flows 
D) Cash in, cash out 
E) Payments − receipts = cash

Question 14

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 15

A prepaid expense would be classified as

Accepted Answer

A) an expense. 
B) an unearned revenue. 
C) a liability. 
D) an asset. 
E) cost of goods sold. 
A) an expense. 
B) an unearned revenue. 
C) a liability. 
D) an asset. 
E) cost of goods sold.

Question 16

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 17

​Return on sales is also known as

Accepted Answer

A) ​profit margin 
B) ​revenues. 
C) ​cost of goods sold. 
D) ​income. 
A) ​profit margin 
B) ​revenues. 
C) ​cost of goods sold. 
D) ​income.

Question 18

The total dollar amount of all goods and services sold during the accounting period is called net sales.

Accepted Answer

A) True 
 B)False

Question 19

All American National Company earned $240,000 last year. The board of directors decided to pay out one-half of the firm's earnings to the stockholders. Before the board's decision, the firm's retained earnings were $740,000. Which of the following statements is true?

Accepted Answer

A) Each shareholder will receive more than he or she received last year. 
B) The firm's retained earnings are too high. 
C) The value of the firm's retained earnings is now $860,000. 
D) The value of the firm's retained earnings is now $620,000. 
E) The firm should be more profitable. 
A) Each shareholder will receive more than he or she received last year. 
B) The firm's retained earnings are too high. 
C) The value of the firm's retained earnings is now $860,000. 
D) The value of the firm's retained earnings is now $620,000. 
E) The firm should be more profitable.

Question 20

Christine's First Job
Christine has just earned her undergraduate degree in accounting and has successfully completed the CPA exam. She recently interviewed with a relatively small and new company and was offered a job. The offer sounded very promising; the job had opportunities to grow with the company and provided diverse challenges. Christine accepted the job.
Once Christine started working, she realized that the owners and employees did not have a general understanding of accounting. She had to teach them the steps in an accounting cycle so they would be able to understand how she was going to create reports. When she talked about the statement of financial position, they had no idea what she was talking about. She was the qualified individual responsible for accounting. No one else working with her had much knowledg
-Refer to Christine's First Job. If the owners did not recognize the term "statement of financial position," Christine could use which of the following more common terms?

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of cash flow 
D) statement of retained earnings 
E) statement of financial ratios 
A) income statement 
B) balance sheet 
C) statement of cash flow 
D) statement of retained earnings 
E) statement of financial ratios

What is inventory turnover and how is it calculated? Why is it important for a manager to track this ratio?

The balance sheet is composed of

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

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Owners' equity is the dollar value that remains after the total liabilities of a business are subtracted from its total assets.

How would it be easier to determine if a firm made or lost money last year-by looking at the balance sheet or by looking at the income statement? Support your answer by explaining in general terms what accounts a balance sheet lists and what accounts an income statement lists.

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

The total dollar amount of all goods and services sold during the accounting period is the

The value of goods on hand for sale to customers is called

If a company has $50,000 of assets, which of the following could be true?

Since furniture and store equipment for Rosalind's Boutique will be held or used for a period longer than one year, they are considered

According to the accounting equation, cash, inventory, equipment, and real estate are classified as owners' equity.

Which of the following best describes the organization of a statement of cash flows?

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

A prepaid expense would be classified as

Return on sales is also known as

The total dollar amount of all goods and services sold during the accounting period is called net sales.

All American National Company earned $240,000 last year. The board of directors decided to pay out one-half of the firm's earnings to the stockholders. Before the board's decision, the firm's retained earnings were $740,000. Which of the following statements is true?

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

What is inventory turnover and how is it calculated? Why is it important for a manager to track this ratio?

The balance sheet is composed of

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

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Owners' equity is the dollar value that remains after the total liabilities of a business are subtracted from its total assets.

How would it be easier to determine if a firm made or lost money last year-by looking at the balance sheet or by looking at the income statement? Support your answer by explaining in general terms what accounts a balance sheet lists and what accounts an income statement lists.

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

​The total dollar amount of all goods and services sold during the accounting period is the

The value of goods on hand for sale to customers is called

If a company has $50,000 of assets, which of the following could be true?

Since furniture and store equipment for Rosalind's Boutique will be held or used for a period longer than one year, they are considered

According to the accounting equation, cash, inventory, equipment, and real estate are classified as owners' equity.

Which of the following best describes the organization of a statement of cash flows?

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

A prepaid expense would be classified as

​Return on sales is also known as

The total dollar amount of all goods and services sold during the accounting period is called net sales.

All American National Company earned $240,000 last year. The board of directors decided to pay out one-half of the firm's earnings to the stockholders. Before the board's decision, the firm's retained earnings were $740,000. Which of the following statements is true?

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

The total dollar amount of all goods and services sold during the accounting period is the

Return on sales is also known as