Question 1

Which statement lists revenues and expenses,and shows the amount of profit a business makes for a specified period of time?

Accepted Answer

A)  Balance sheet
B)  Statement of retained earnings
C)  Income statement
D)  Cash flow statement C

Question 2

Barb's Bakery
Barb Bowman fell into the baking business. It used to be a hobby. She made and sold cakes and cookies for birthdays and family events in the neighborhood and for friends' parties. Now, having opened the bakery, the business has taken off and Barb is wondering what sort of records she needs to keep.

-Barb needs to know that accounting is important to her business because of all of these EXCEPT

Accepted Answer

A)  it provides easy to understand plans for business operations.
B)  it shows how much her business is worth.
C)  it is the bakery industry requirement.
D)  she can't know what her business is doing without it. C

Question 3

Briefly discuss the different types of budgets that make up the master budget.

Accepted Answer

A master budget,also referred to as a comprehensive budget,consists of sets of budgets that detail all projected receipts and spending for the budgeted period.
The sales budget shows the projected future level of sales in units multiplied by the sales price per unit.The purchases budget shows the number of units that are expected to be acquired during the budget period.The cost of goods sold budget is a schedule that shows the predicted cost of product actually sold during the accounting period.The labor budget shows both the amount and cost of labor needed to meet output goals.The selling,general,and administrative (SG&A)budget contains both costs that change with production and costs that do not.The overhead budget shows all overhead costs.
The budgets that have been completed to this point can now be combined into a "pro forma" budgeted income statement.The final schedules to be completed to produce a master budget are a cash receipts budget,a cash disbursements budget,and a cash budget.

Question 4

Lenders use operating income specifically

Accepted Answer

A)  as a measure of how well management achieved sales.
B)  as an indication of future sales.
C)  as a measure of how much debt a business can support.
D)  as an indication of a business's ability to control costs.

Question 5

Which of the following is more indicative of a business's financial strength?

Accepted Answer

A)  Short-term investments
B)  Prepaid expenses
C)  Accounts payable
D)  Large inventories

Question 6

Barb's Bakery
Barb Bowman fell into the baking business. It used to be a hobby. She made and sold cakes and cookies for birthdays and family events in the neighborhood and for friends' parties. Now, having opened the bakery, the business has taken off and Barb is wondering what sort of records she needs to keep.

-Which of these most commonly used accounting systems may be useful for Barb to keep records?

Accepted Answer

A)  Peachtree
B)  TaxCut
C)  TurboTax
D)  Checkpro

Question 7

An accounting system should accomplish all of the following tasks EXCEPT

Accepted Answer

A)  provide a simple,easy-to-understand user interface.
B)  have an exhaustive context-sensitive help function.
C)  enforce security measures to reduce the opportunity for employee misuse or fraud.
D)  avoid the export of financial data.

Question 8

_____ analysis is based on the concept that a dollar to be received right now has more utility than does a dollar to be received at some time in the future.

Accepted Answer

A)  Liquidity
B)  Net present value
C)  Financial strength
D)  Budget

Question 9

Which of the following accounting functions allows a business to keep track of what it owes,make timely payments in order to capture prompt pay discounts,and maintain a good credit rating?

Accepted Answer

A)  Credit card sales
B)  Accounts receivable records
C)  Accounts payable records
D)  Payroll records

Question 10

Accurate and timely _____ are essential for making decisions concerning the extension of credit.They also help produce accurate billing of customers,and thus help to maintain good customer relations.

Accepted Answer

A)  payroll records
B)  leasehold records
C)  accounts payable records
D)  accounts receivable records

Question 11

Which of these refers to the concept that information flows from the income statement through the statement of retained earnings,and of owners' equity to the balance sheet?

Accepted Answer

A)  Articulate
B)  Going concern
C)  Opportunity cost
D)  Leveraging

Question 12

Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations.

Accepted Answer

A) True 
 B)False

Question 13

Which of these is a statement of what a business owns,what it owes to others,and how much value the owners have invested in it?

Accepted Answer

A)  Income statement
B)  Balance sheet
C)  Cash flow statement
D)  Statement of retained earnings

Question 14

The final output of a computer system is a set of financial statements and reports.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following accounting concepts makes it possible to separate business transactions from personal transactions?

Accepted Answer

A)  Business entity
B)  Costs and expenses
C)  Going concern
D)  Accounting equation

Question 16

The cost of goods sold budget shows the predicted cost of product actually sold during the accounting period.

Accepted Answer

A) True 
 B)False

Question 17

What becomes a standard against which performance can be measured,once it has been established?

Accepted Answer

A)  Budget
B)  Liquidity
C)  Balance sheet
D)  Statement of cash flows

Question 18

To make good decisions,we need all of these EXCEPT

Accepted Answer

A)  good information.
B)  efficient ways to condense information so it is understandable.
C)  methods to help compare alternatives.
D)  certainty situation.

Question 19

Which of these refers to the ability of a business to survive adverse financial events?

Accepted Answer

A)  Liquidity
B)  Financial flexibility
C)  Financial strength
D)  Profitability

Question 20

_____ is the idea that it is cheaper (per item)to make many of an item than few.

Accepted Answer

A)  Inventory turnover
B)  Economy of scale
C)  Breakeven point
D)  Historical value

Exam 13: Small Business Accounting: Projecting and Evaluating Performance

Which statement lists revenues and expenses,and shows the amount of profit a business makes for a specified period of time?

Briefly discuss the different types of budgets that make up the master budget.

Lenders use operating income specifically

Which of the following is more indicative of a business's financial strength?

An accounting system should accomplish all of the following tasks EXCEPT

_____ analysis is based on the concept that a dollar to be received right now has more utility than does a dollar to be received at some time in the future.

Which of the following accounting functions allows a business to keep track of what it owes,make timely payments in order to capture prompt pay discounts,and maintain a good credit rating?

Accurate and timely _____ are essential for making decisions concerning the extension of credit.They also help produce accurate billing of customers,and thus help to maintain good customer relations.

Which of these refers to the concept that information flows from the income statement through the statement of retained earnings,and of owners' equity to the balance sheet?

Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations.

Which of these is a statement of what a business owns,what it owes to others,and how much value the owners have invested in it?

The final output of a computer system is a set of financial statements and reports.

Which of the following accounting concepts makes it possible to separate business transactions from personal transactions?

The cost of goods sold budget shows the predicted cost of product actually sold during the accounting period.

What becomes a standard against which performance can be measured,once it has been established?

To make good decisions,we need all of these EXCEPT

Which of these refers to the ability of a business to survive adverse financial events?

_____ is the idea that it is cheaper (per item) to make many of an item than few.