Question 1

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 2

Bonds payable are examples of _____.

Accepted Answer

A)  current liabilities 
B)  owners' equity 
C)  fixed assets 
D)  expenses 
E)  long-term liabilities

Question 3

The statement of financial position presents the business firm's assets, liabilities, and owners' equity accounts at the end of an accounting period, such as on December 31, whereas the income statement summarizes operations during a specified accounting period.

Accepted Answer

A) True 
 B)False

Question 4

An accountant can calculate a return on sales ratio to determine how well the firm is using the money invested by the owners.

Accepted Answer

A) True 
 B)False

Question 5

List the five steps in a typical accounting cycle.Then explain why each step is important.

Accepted Answer

The answer of List the five steps in a typical...

Question 6

Describe the employment trends for accountants, auditors, and managers in the accounting profession between now and the year 2016.Then describe what skills employees must have in order to be successful in the accounting profession.

Accepted Answer

The answer of Describe the employment trends for accountants, auditors,...

Question 7

An audit is

Accepted Answer

A)  performed by the firm's private bookkeepers. 
B)  not necessary if the firm used generally accepted bookkeeping procedures. 
C)  required by many bankers and lenders who are trying to validate a firm's accounting statements. 
D)  a waste of the firm's resources. 
E)  a guarantee that a firm hasn't "cooked" the books.

Question 8

The value of a firm's stock plus any retained earnings that have accumulated to date is referred to as _____.

Accepted Answer

A)  current assets 
B)  long-term liabilities 
C)  fixed assets 
D)  owners' equity 
E)  revenue

Question 9

The information for a journal entry is written in the general or specialized journal; then a source document for the transaction is prepared.

Accepted Answer

A) True 
 B)False

Question 10

The statement of cash flows illustrates the effects on cash of the operating, investing, and financing activities of a company for an accounting period.

Accepted Answer

A) True 
 B)False

Question 11

Current assets are assets that will be used in two years or less.

Accepted Answer

A) True 
 B)False

Question 12

Brian has to collect and organize his company's receipts, invoices, and sales slips that show the business's daily transactions.These are all considered ____ in accounting.

Accepted Answer

A)  postings 
B)  source documents 
C)  general ledgers 
D)  specialized ledgers 
E)  trial balances

Question 13

All of the following except which are acceptable ways of stating the accounting equation?

Accepted Answer

A)  owners' equity = assets - liabilities. 
B)  assets = liabilities + owners' equity. 
C)  owners' equity - liabilities = assets. 
D)  assets - liabilities = owners' equity. 
E)  assets = shareholders' equity + liabilities.

Question 14

An important measure of a firm's ability to pay its current liabilities quickly is the _____.

Accepted Answer

A)  return on sales ratio 
B)  acid-test ratio 
C)  calculation of cost of goods sold 
D)  earnings per share 
E)  debt-to-equity ratio

Question 15

The cash at the end of the year reported on the statement of cash flows is the same as the

Accepted Answer

A)  cash amount reported on the firm's balance sheet. 
B)  cash amount reported on the firm's income statement. 
C)  net income reported on the firm's income statement. 
D)  owners' equity amount reported on the firm's balance sheet. 
E)  total amount of assets reported on the firm's balance sheet.

Question 16

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

Question 17

The financial ratio obtained by dividing net income after taxes by the number of shares of common stock outstanding is the _____.

Accepted Answer

A)  working capital 
B)  return on owners' equity 
C)  current ratio 
D)  earnings per share 
E)  return on sales ratio

Question 18

A type of exam that emphasizes not only accounting but also decision-making and critical-thinking skills is the _____.

Accepted Answer

A)  certified management accounting exam 
B)  certified critical thinking exam 
C)  decision-support management exam 
D)  certified financial planner exam 
E)  critical-thinking exam

Question 19

Accounting is the process of systematically determining how much money a company owes the Internal Revenue Service.

Accepted Answer

A) True 
 B)False

Question 20

Ernst & Young, KPMG, and PricewaterhouseCoopers are all

Accepted Answer

A)  private accounting firms. 
B)  financial intermediaries. 
C)  government accounting agencies. 
D)  management consultants. 
E)  public accounting firms.

Exam 15: Using Accounting Information

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

Bonds payable are examples of _____.

The statement of financial position presents the business firm's assets, liabilities, and owners' equity accounts at the end of an accounting period, such as on December 31, whereas the income statement summarizes operations during a specified accounting period.

An accountant can calculate a return on sales ratio to determine how well the firm is using the money invested by the owners.

List the five steps in a typical accounting cycle.Then explain why each step is important.

Describe the employment trends for accountants, auditors, and managers in the accounting profession between now and the year 2016.Then describe what skills employees must have in order to be successful in the accounting profession.

An audit is

The value of a firm's stock plus any retained earnings that have accumulated to date is referred to as _____.

The information for a journal entry is written in the general or specialized journal; then a source document for the transaction is prepared.

The statement of cash flows illustrates the effects on cash of the operating, investing, and financing activities of a company for an accounting period.

Current assets are assets that will be used in two years or less.

Brian has to collect and organize his company's receipts, invoices, and sales slips that show the business's daily transactions.These are all considered ____ in accounting.

All of the following except which are acceptable ways of stating the accounting equation?

An important measure of a firm's ability to pay its current liabilities quickly is the _____.

The cash at the end of the year reported on the statement of cash flows is the same as the

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 financial ratio obtained by dividing net income after taxes by the number of shares of common stock outstanding is the _____.

A type of exam that emphasizes not only accounting but also decision-making and critical-thinking skills is the _____.

Accounting is the process of systematically determining how much money a company owes the Internal Revenue Service.

Ernst & Young, KPMG, and PricewaterhouseCoopers are all