Question 1

Sarbox requires that the CFO and CEO certify that the firm's financial statements are true,fair,and accurate.

Accepted Answer

A) True 
 B)False

Question 2

________ is the amount paid for an existing business beyond the value of its other assets.

Accepted Answer

A)  Goodwill 
B)  Excess compensation 
C)  Licensing 
D)  Asset promotion 
A)  Goodwill 
B)  Excess compensation 
C)  Licensing 
D)  Asset promotion

Question 3

Short Case Scenario 14-1
Mary Ann has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business that is up for sale. The current owners claim that the business is highly profitable, but Mary Ann has her doubts. She wonders why the owners would be so interested in selling the business if it is such a money maker. Furthermore, the price that they are asking seems high to Mary Ann. Without any formal training in accounting, Mary Ann asks a friend, Rolanda, for advice.
-Mary Ann begins to express some doubts to the sellers after a close examination of the financial statements and auditor's report.The sellers claim that they have a number of contracts that are in the works but that are not reflected in the financial statements.According to GAAP,where are transactions recognized in the financial statements?

Accepted Answer

There are two conditions that must exist

Question 4

A long-term liability is ________.

Accepted Answer

A)  the process of distributing the cost of an asset over its useful life 
B)  the amount paid for an existing business above the value of its other assets 
C)  a debt that must be paid within the year 
D)  a debt that is not due for at least one year 
A)  the process of distributing the cost of an asset over its useful life 
B)  the amount paid for an existing business above the value of its other assets 
C)  a debt that must be paid within the year 
D)  a debt that is not due for at least one year

Question 5

How do accountants define merchandise inventory?

Accepted Answer

Merchandise inventory is the c

Question 6

________ are funds that flow into a business from the sale of goods or services.

Accepted Answer

A)  Net profits 
B)  Cost of goods sold 
C)  Revenues 
D)  Assets 
A)  Net profits 
B)  Cost of goods sold 
C)  Revenues 
D)  Assets

Question 7

What is goodwill?

Accepted Answer

Goodwill is the amou

Question 8

Discuss the role of ethics in accounting.

Accepted Answer

The purpose of ethics in accounting is t

Question 9

The primary concern behind the CPA Vision Project was ________.

Accepted Answer

A)  a decline in the number of people entering the accounting profession 
B)  low salaries for mid- and upper-level accounting managers 
C)  ethical lapses by private accountants 
D)  a surplus of CPAs and declining revenues 
A)  a decline in the number of people entering the accounting profession 
B)  low salaries for mid- and upper-level accounting managers 
C)  ethical lapses by private accountants 
D)  a surplus of CPAs and declining revenues

Question 10

Short Case Scenario 14-1
Mary Ann has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business that is up for sale. The current owners claim that the business is highly profitable, but Mary Ann has her doubts. She wonders why the owners would be so interested in selling the business if it is such a money maker. Furthermore, the price that they are asking seems high to Mary Ann. Without any formal training in accounting, Mary Ann asks a friend, Rolanda, for advice.
-Mary Ann learns that the current owners face a negative owners' equity.What does this mean?

Accepted Answer

Liabilities outweigh

Question 11

The accounting equation is ________.

Accepted Answer

A)  Assets + Liabilities = Owners' Equity 
B)  Assets = Liabilities * Owners' Equity 
C)  Assets = Liabilities + Owners' Equity 
D)  Assets * Liabilities = Owners' Equity 
A)  Assets + Liabilities = Owners' Equity 
B)  Assets = Liabilities * Owners' Equity 
C)  Assets = Liabilities + Owners' Equity 
D)  Assets * Liabilities = Owners' Equity

Question 12

The code of professional conduct for public accountants in the United States is maintained by the American Institute of Certified Public Accountants.

Accepted Answer

A) True 
 B)False

Question 13

A(n)________ is a detailed statement of estimated receipts and expenditures for a period of time in the future.

Accepted Answer

A)  income statement 
B)  balance sheet 
C)  budget 
D)  statement of retained earnings 
A)  income statement 
B)  balance sheet 
C)  budget 
D)  statement of retained earnings

Question 14

A firm's financial accounting system is concerned with external users of information.

Accepted Answer

A) True 
 B)False

Question 15

A(n)________ is a salaried accountant hired by a business to carry out its day-to-day financial activities.

Accepted Answer

A)  public accountant 
B)  advisor 
C)  private accountant 
D)  auditor 
A)  public accountant 
B)  advisor 
C)  private accountant 
D)  auditor

Question 16

A balance sheet is sometimes referred to as ________.

Accepted Answer

A)  a statement of financial position 
B)  an income statement 
C)  a profit and loss statement 
D)  the bottom line 
A)  a statement of financial position 
B)  an income statement 
C)  a profit and loss statement 
D)  the bottom line

Question 17

All firms must issue a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 18

________ expenses result from activities related to selling goods or services.

Accepted Answer

A)  Gross 
B)  Revenue 
C)  Sales and marketing 
D)  Income 
A)  Gross 
B)  Revenue 
C)  Sales and marketing 
D)  Income

Question 19

There are three kinds of assets: current,fixed,and long-term.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is NOT a potential user of accounting information?

Accepted Answer

A)  managers 
B)  employees 
C)  unions 
D)  All of these are potential users of accounting information. 
A)  managers 
B)  employees 
C)  unions 
D)  All of these are potential users of accounting information.

Sarbox requires that the CFO and CEO certify that the firm's financial statements are true,fair,and accurate.

________ is the amount paid for an existing business beyond the value of its other assets.

A long-term liability is ________.

How do accountants define merchandise inventory?

________ are funds that flow into a business from the sale of goods or services.

What is goodwill?

Discuss the role of ethics in accounting.

The primary concern behind the CPA Vision Project was ________.

The accounting equation is ________.

The code of professional conduct for public accountants in the United States is maintained by the American Institute of Certified Public Accountants.

A(n)________ is a detailed statement of estimated receipts and expenditures for a period of time in the future.

A firm's financial accounting system is concerned with external users of information.

A(n)________ is a salaried accountant hired by a business to carry out its day-to-day financial activities.

A balance sheet is sometimes referred to as ________.

All firms must issue a statement of cash flows.

________ expenses result from activities related to selling goods or services.

There are three kinds of assets: current,fixed,and long-term.

Which of the following is NOT a potential user of accounting information?

The U.S.Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Pricing, Distributing, and Promoting Products

Money and Banking

Managing Finances

Filters

Exam 14: The Role of Accountants and Accounting Information

Sarbox requires that the CFO and CEO certify that the firm's financial statements are true,fair,and accurate.

________ is the amount paid for an existing business beyond the value of its other assets.

A long-term liability is ________.

How do accountants define merchandise inventory?

________ are funds that flow into a business from the sale of goods or services.

What is goodwill?

Discuss the role of ethics in accounting.

The primary concern behind the CPA Vision Project was ________.

The accounting equation is ________.

The code of professional conduct for public accountants in the United States is maintained by the American Institute of Certified Public Accountants.

A(n)________ is a detailed statement of estimated receipts and expenditures for a period of time in the future.

A firm's financial accounting system is concerned with external users of information.

A(n)________ is a salaried accountant hired by a business to carry out its day-to-day financial activities.

A balance sheet is sometimes referred to as ________.

All firms must issue a statement of cash flows.

________ expenses result from activities related to selling goods or services.

There are three kinds of assets: current,fixed,and long-term.

Which of the following is NOT a potential user of accounting information?

The U.S.Business Environment

Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

The Global Context of Business

Business Management

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Pricing, Distributing, and Promoting Products

Money and Banking

Managing Finances

Filters