Question 1

Explain why a firm's financial statements should be audited.

Accepted Answer

The answer of Explain why a firm's financial statements should...

Question 2

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

Question 3

Juan is reviewing the operating expenses for his business.He notices that operating expenses are categorized as ___ expenses related to his business' marketing activities or ___ expenses incurred in managing the business.

Accepted Answer

A)  selling;general 
B)  large;small 
C)  current;long term 
D)  one-time;recurring

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

​Return on sales is also known as

Accepted Answer

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

Question 6

What are the three activities according to which a statement of cash flows is organized?

Accepted Answer

A)  Operating,selling,and investing 
B)  Financing,buying,selling 
C)  Investing,financing,and expensing 
D)  Processing,operating,receiving 
E)  Operating,investing,financing

Question 7

Which section of the statement of cash flows would show Rena'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

Question 8

A public accountant works on a fee basis for clients.

Accepted Answer

A) True 
 B)False

Question 9

Revenues − cost of goods sold − expenses = net income characterizes which financial statement?

Accepted Answer

A)  Balance sheet 
B)  Statement of retained earnings 
C)  Statement of cash flows 
D)  Statement of financial position 
E)  Income statement

Question 10

Tom and Lynn get together and start a mortgage brokerage business.They each contribute $25,000 of capital to the business.After the first year of operation,the total owners' equity is listed as $60,000.Most likely,the additional $10,000 of owners' equity is

Accepted Answer

A)  common stock. 
B)  long-term liabilities. 
C)  current liabilities. 
D)  retained earnings. 
E)  a bank loan.

Question 11

Amy Jones started a small manufacturing firm two years ago.Now,after two years,she decides it is time to hire an accountant to work in the office and process all her financial data.This accountant will be a

Accepted Answer

A)  certified auditor. 
B)  certified bookkeeper. 
C)  managerial bookkeeping clerk. 
D)  private accountant. 
E)  public accountant.

Question 12

When smart investors take a practical approach to evaluating a company's accounting information,they need only look at the snapshot data that a balance sheet offers as it will be the primary tool to guide potentially profitable investments.

Accepted Answer

A) True 
 B)False

Question 13

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

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

Dr.Rick Torres 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 15

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

Accepted Answer

A) True 
 B)False

Question 16

Wallace Plumbing Company had income from operations of $110,000.It paid federal income taxes of $26,000.What was the firm's net income after taxes?

Accepted Answer

A)  $144,000 
B)  $98,000 
C)  $84,000 
D)  $22,000 
E)  $12,000

Question 17

​The ___ is divided by the average inventory to obtain the inventory turnover. expenses

Accepted Answer

A)  ​cost of goods sold 
B)  ​revenues 
C)  ​liabilities 
D)  ​expenses

Question 18

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

Question 19

Energizer offers its customers a reduction in price if they pay for their shipments of batteries within ten days of receiving them.This is a(n)

Accepted Answer

A)  sales allowance. 
B)  trade discount. 
C)  sales return. 
D)  sales discount. 
E)  inventory reduction.

Question 20

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

Exam 15: Using Management and Accounting Information

Explain why a firm's financial statements should be audited.

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?

Juan is reviewing the operating expenses for his business.He notices that operating expenses are categorized as _ expenses related to his business' marketing activities or _ expenses incurred in managing the business.

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

Return on sales is also known as

What are the three activities according to which a statement of cash flows is organized?

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

A public accountant works on a fee basis for clients.

Revenues − cost of goods sold − expenses = net income characterizes which financial statement?

Tom and Lynn get together and start a mortgage brokerage business.They each contribute $25,000 of capital to the business.After the first year of operation,the total owners' equity is listed as $60,000.Most likely,the additional $10,000 of owners' equity is

Amy Jones started a small manufacturing firm two years ago.Now,after two years,she decides it is time to hire an accountant to work in the office and process all her financial data.This accountant will be a

When smart investors take a practical approach to evaluating a company's accounting information,they need only look at the snapshot data that a balance sheet offers as it will be the primary tool to guide potentially profitable investments.

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

Dr.Rick Torres 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 return on sales ratio indicates how effectively a firm is transforming its sales into profits.

Wallace Plumbing Company had income from operations of $110,000.It paid federal income taxes of $26,000.What was the firm's net income after taxes?

The ___ is divided by the average inventory to obtain the inventory turnover. expenses

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

Energizer offers its customers a reduction in price if they pay for their shipments of batteries within ten days of receiving them.This is a(n)

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

Exam 15: Using Management and Accounting Information

Explain why a firm's financial statements should be audited.

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?

Juan is reviewing the operating expenses for his business.He notices that operating expenses are categorized as ___ expenses related to his business' marketing activities or ___ expenses incurred in managing the business.

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

​Return on sales is also known as

What are the three activities according to which a statement of cash flows is organized?

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

A public accountant works on a fee basis for clients.

Revenues − cost of goods sold − expenses = net income characterizes which financial statement?

Tom and Lynn get together and start a mortgage brokerage business.They each contribute $25,000 of capital to the business.After the first year of operation,the total owners' equity is listed as $60,000.Most likely,the additional $10,000 of owners' equity is

Amy Jones started a small manufacturing firm two years ago.Now,after two years,she decides it is time to hire an accountant to work in the office and process all her financial data.This accountant will be a

When smart investors take a practical approach to evaluating a company's accounting information,they need only look at the snapshot data that a balance sheet offers as it will be the primary tool to guide potentially profitable investments.

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

Dr.Rick Torres 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 return on sales ratio indicates how effectively a firm is transforming its sales into profits.

Wallace Plumbing Company had income from operations of $110,000.It paid federal income taxes of $26,000.What was the firm's net income after taxes?

​The ___ is divided by the average inventory to obtain the inventory turnover. expenses

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

Energizer offers its customers a reduction in price if they pay for their shipments of batteries within ten days of receiving them.This is a(n)

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

Juan is reviewing the operating expenses for his business.He notices that operating expenses are categorized as _ expenses related to his business' marketing activities or _ expenses incurred in managing the business.

Return on sales is also known as

The ___ is divided by the average inventory to obtain the inventory turnover. expenses