Question 1

What is the accounts receivable turnover? What is an inventory turnover? Why are these important ratios for a manager to track?

Accepted Answer

The answer of What is the accounts receivable turnover? What...

Question 2

External groups that require information on a firm's financial condition before they will commit themselves to either short-term or long-term loans are known as _____.

Accepted Answer

A)  stockholders 
B)  owners 
C)  lenders 
D)  proprietors 
E)  auditors

Question 3

While chief executives and financial officers are currently not subject to criminal penalties, they are required to certify periodic financial reports.

Accepted Answer

A) True 
 B)False

Question 4

After Jocelyn, a public accountant, prepares and checks the financial statements for one of her clients, she then

Accepted Answer

A)  sends the bill to her client because everything is complete. 
B)  prepares a trial balance to ensure the statements are accurate. 
C)  closes the books and prepares a post-closing balance. 
D)  begins the next period of accounting records. 
E)  determines whether or not a post-closing trial balance is necessary.

Question 5

The process of spreading the cost of a fixed asset over the asset's useful life is called _____.

Accepted Answer

A)  expensing 
B)  depreciation 
C)  apportioning 
D)  crediting 
E)  distributing

Question 6

During the year Comer, Inc., had $200,000 in goods available for sale.At the end of the accounting period it had an ending inventory of $40,000.The cost of goods sold by Comer was therefore _____.

Accepted Answer

A)  $200,000 
B)  $160,000 
C)  $40,000 
D)  $20,000 
E)  $10,000

Question 7

Ruin Company's net sales for the period were $175,000.Its cost of goods sold was $85,000.What is this firm's gross profit on sales?

Accepted Answer

A)  $175,000 
B)  $135,000 
C)  $125,000 
D)  $100,000 
E)  $90,000

Question 8

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 knowledge.They did not even know the different financial ratios that someone could use to understand the financial standing of a company.Christine knows it will be a challenge to keep everyone on the same page when it comes to numbers and reports.
-Refer to Christine's First Job.When Christine explained the asset side of the statement, she included which of the following?

Accepted Answer

A)  retained earnings 
B)  notes payable 
C)  merchandise inventory 
D)  long-term liabilities 
E)  stockholders' equity

Question 9

If the liabilities of a business are $85,000 and the owners' equity is $110,000, which of the following is a correct statement?

Accepted Answer

A)  Assets equal $25,000. 
B)  Assets equal $195,000. 
C)  Assets equal $110,000. 
D)  Assets equal $85,000. 
E)  It is impossible to determine the value of the assets.

Question 10

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 knowledge.They did not even know the different financial ratios that someone could use to understand the financial standing of a company.Christine knows it will be a challenge to keep everyone on the same page when it comes to numbers and reports.
-The process of systematically collecting, analyzing, and reporting financial information is called _____.

Accepted Answer

A)  accounting 
B)  bookkeeping 
C)  auditing 
D)  journalizing 
E)  revenues

Question 11

The double-entry bookkeeping system requires two separate entries to maintain the balance shown in the basic accounting equation.

Accepted Answer

A) True 
 B)False

Question 12

Because of the accounting problems at WorldCom, Enron, and other major corporations, the U.S.Congress tightened key accounting and financial reporting rules, and corporations have enacted more stringent accounting practices.

Accepted Answer

A) True 
 B)False

Question 13

An airplane that FedEx owns and uses to deliver packages is a(n) ____ of FedEx.

Accepted Answer

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

Question 14

The debts of a business are called its liabilities.

Accepted Answer

A) True 
 B)False

Exam 15: Using Accounting Information

What is the accounts receivable turnover? What is an inventory turnover? Why are these important ratios for a manager to track?

External groups that require information on a firm's financial condition before they will commit themselves to either short-term or long-term loans are known as _____.

While chief executives and financial officers are currently not subject to criminal penalties, they are required to certify periodic financial reports.

After Jocelyn, a public accountant, prepares and checks the financial statements for one of her clients, she then

The process of spreading the cost of a fixed asset over the asset's useful life is called _____.

During the year Comer, Inc., had $200,000 in goods available for sale.At the end of the accounting period it had an ending inventory of $40,000.The cost of goods sold by Comer was therefore _____.

Ruin Company's net sales for the period were $175,000.Its cost of goods sold was $85,000.What is this firm's gross profit on sales?

If the liabilities of a business are $85,000 and the owners' equity is $110,000, which of the following is a correct statement?

The double-entry bookkeeping system requires two separate entries to maintain the balance shown in the basic accounting equation.

Because of the accounting problems at WorldCom, Enron, and other major corporations, the U.S.Congress tightened key accounting and financial reporting rules, and corporations have enacted more stringent accounting practices.

An airplane that FedEx owns and uses to deliver packages is a(n) ____ of FedEx.

The debts of a business are called its liabilities.