Deck 14: The Role of Accountants and Accounting Information

Question 1

Owners' equity will increase if the company operates at a loss or if owners withdraw assets.

Answer 1

False

Question 2

Candidates without a Bachelor's degree but with fraud-related professional experience may substitute two years of experience for each year of academic study.

Answer 2

True

Question 3

A budget is a type of internal financial statement.

Answer 3

True

Question 4

The decline in the number of accounting professionals was the impetus for the Sarbanes-Oxley Act (2002).

Question 5

Ethics remains an area where one person who is willing to "do the right thing" can make a difference.

Question 6

_____ is a system for measuring business performance and translating those measurements into information for management activities.

A) Bookkeeping
B) Accounting
C) Controlling
D) Auditing

Question 7

In the United States, the _____ requires firms to file financial information disclosures to potential and current investors in corporations.

A) Accounting Disclosure Board
B) New York Stock Exchange
C) Securities and Exchange Commission
D) American Institute of Certified Public Accountants

Question 8

Eligibility to take the Certified Fraud Examiner (CFE) exam includes _____.

A) a Bachelor's degree in accounting
B) experience of at least two years in any of several fraud-related areas
C) a minimum of one year of auditing experience
D) all of the above

Question 9

Dividends are paid from _____.

A) long-term assets
B) owners' equity
C) inventory
D) remaining liabilities

Question 10

According to the text, _____ may represent the most important figure in any business enterprise.

A) the bottom line
B) Revenues - Expenses
C) Profit (or loss)
D) any of these

Question 11

Company A is not "liquid." What does this mean?

Question 12

Aside from the head accountant's rhetoric in this scenario, what was the bottom line answer that the general manager was looking for?

Question 13

Why is the budget referred to as the "internal financial statement"?

Question 14

If the general manager had asked the head accountant to explain full disclosure to the group, how might the head accountant have described it?

Question 15

What additional information might the head accountant have shared with the group, which included employees unfamiliar with the budget process?

Question 16

What is a certified management accountant (CMA)?

Question 17

What is one way in which Ken Woods may evaluate Black Oak's financial health?

Question 18

What are operating expenses? How has Ken Woods worked to keep such expenses low at Black Oak?

Question 19

When is the earnings cycle complete at Black Oak Brewing Company?