Question 1

The most commonly used liquidity ratio is the current ratio,which has been called the "banker's ratio."

Accepted Answer

A) True 
 B)False

Question 2

Certified public accountants are licensed by the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 3

A current asset is ________.

Accepted Answer

A)  an amount due from a customer who has purchased goods on credit 
B)  an asset with long-term use or value such as land, buildings, and equipment 
C)  an asset that can or will be converted to cash within the following year 
D)  a nonphysical asset such as a patent or trademark 
A)  an amount due from a customer who has purchased goods on credit 
B)  an asset with long-term use or value such as land, buildings, and equipment 
C)  an asset that can or will be converted to cash within the following year 
D)  a nonphysical asset such as a patent or trademark

Question 4

The income statement is also referred to as the ________.

Accepted Answer

A)  profit-and-loss statement 
B)  bottom line 
C)  revenue account 
D)  winning and losses 
A)  profit-and-loss statement 
B)  bottom line 
C)  revenue account 
D)  winning and losses

Question 5

________ are rules and procedures governing the content and form of financial reports.

Accepted Answer

A)  National guidelines 
B)  Accounting and Financial Rules 
C)  National Association of Accounting Principles 
D)  Generally Accepted Accounting Principles 
A)  National guidelines 
B)  Accounting and Financial Rules 
C)  National Association of Accounting Principles 
D)  Generally Accepted Accounting Principles

Question 6

________ is the ability of a firm to finance an investment through borrowed funds.

Accepted Answer

A)  Liquidity 
B)  Leverage 
C)  Solvency 
D)  Profitability 
A)  Liquidity 
B)  Leverage 
C)  Solvency 
D)  Profitability

Question 7

What is market shutdown?

Accepted Answer

In a recession,there

Question 8

Howard Industries is having a CPA firm review its financial records to confirm their conformance with generally accepted accounting principles.Howard Industries is in the process of a(n)________.

Accepted Answer

A)  company-wide analysis 
B)  portfolio analysis 
C)  audit 
D)  preliminary examination 
A)  company-wide analysis 
B)  portfolio analysis 
C)  audit 
D)  preliminary examination

Question 9

What is a "toxic asset"?

Accepted Answer

A "toxic asset" is a

Question 10

The usefulness of accounting tools and methods depends on truth and ethics in their application.

Accepted Answer

A) True 
 B)False

Question 11

What does a statement of cash flows tell users?

Accepted Answer

A statement of cash flows is a

Question 12

Which of the following is NOT a core competency in accounting as identified by the CPA Vision Project?

Accepted Answer

A)  skills in interpreting converging information 
B)  strategic and critical skills 
C)  technology skills 
D)  computational skills 
A)  skills in interpreting converging information 
B)  strategic and critical skills 
C)  technology skills 
D)  computational skills

Question 13

The ________ is the financial statement describing a firm's yearly cash receipts and cash payments.

Accepted Answer

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

Question 14

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.
-Rolanda suggests that Mary Ann hire an accountant to audit the financial statements.Mary Ann is not sure what an audit involves.Explain auditing.

Accepted Answer

An audit is a systematic evaluation of t

Question 15

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 16

Intangible assets include patents,trademarks,copyrights,and franchise fees.

Accepted Answer

A) True 
 B)False

Question 17

What is a leveraged buyout?

Accepted Answer

In a leveraged buyou

Question 18

At Waste Management,accountants overstated income in financial statements by improperly calculating depreciation and salvage values for equipment.

Accepted Answer

A) True 
 B)False

Question 19

Current assets include cash and assets that can be converted into cash within the following year.

Accepted Answer

A) True 
 B)False

Question 20

________ are costs,other than the cost of goods sold,incurred in producing a good or service.

Accepted Answer

A)  Operating incomes 
B)  Depreciation 
C)  Operating expenses 
D)  Inventory expenses 
A)  Operating incomes 
B)  Depreciation 
C)  Operating expenses 
D)  Inventory expenses

The most commonly used liquidity ratio is the current ratio,which has been called the "banker's ratio."

Certified public accountants are licensed by the Securities and Exchange Commission.

A current asset is ________.

The income statement is also referred to as the ________.

________ are rules and procedures governing the content and form of financial reports.

________ is the ability of a firm to finance an investment through borrowed funds.

What is market shutdown?

Howard Industries is having a CPA firm review its financial records to confirm their conformance with generally accepted accounting principles.Howard Industries is in the process of a(n)________.

What is a "toxic asset"?

The usefulness of accounting tools and methods depends on truth and ethics in their application.

What does a statement of cash flows tell users?

Which of the following is NOT a core competency in accounting as identified by the CPA Vision Project?

The ________ is the financial statement describing a firm's yearly cash receipts and cash payments.

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

Intangible assets include patents,trademarks,copyrights,and franchise fees.

What is a leveraged buyout?

At Waste Management,accountants overstated income in financial statements by improperly calculating depreciation and salvage values for equipment.

Current assets include cash and assets that can be converted into cash within the following year.

________ are costs,other than the cost of goods sold,incurred in producing a good or service.

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

The most commonly used liquidity ratio is the current ratio,which has been called the "banker's ratio."

Certified public accountants are licensed by the Securities and Exchange Commission.

A current asset is ________.

The income statement is also referred to as the ________.

________ are rules and procedures governing the content and form of financial reports.

________ is the ability of a firm to finance an investment through borrowed funds.

What is market shutdown?

Howard Industries is having a CPA firm review its financial records to confirm their conformance with generally accepted accounting principles.Howard Industries is in the process of a(n)________.

What is a "toxic asset"?

The usefulness of accounting tools and methods depends on truth and ethics in their application.

What does a statement of cash flows tell users?

Which of the following is NOT a core competency in accounting as identified by the CPA Vision Project?

The ________ is the financial statement describing a firm's yearly cash receipts and cash payments.

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

Intangible assets include patents,trademarks,copyrights,and franchise fees.

What is a leveraged buyout?

At Waste Management,accountants overstated income in financial statements by improperly calculating depreciation and salvage values for equipment.

Current assets include cash and assets that can be converted into cash within the following year.

________ are costs,other than the cost of goods sold,incurred in producing a good or service.

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