Question 1

________ are non-physical assets, such as a patent or trademark, that have economic value in the form of expected benefits.

Accepted Answer

A)  Intangible assets 
B)  Fixed assets 
C)  Prepaid assets 
D)  Current assets 
E)  Long-term assets 
A)  Intangible assets 
B)  Fixed assets 
C)  Prepaid assets 
D)  Current assets 
E)  Long-term assets

Question 2

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory. Maggie purchased an additional $5500 in antiques and sold all but $7500. What is Maggie's cost of goods sold?

Accepted Answer

A)  $27 000 
B)  $12 000 
C)  $19 500 
D)  $13 000 
E)  None of these 
A)  $27 000 
B)  $12 000 
C)  $19 500 
D)  $13 000 
E)  None of these

Question 3

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's operating income?

Accepted Answer

A)  $6 million 
B)  $17 million 
C)  $3 million 
D)  $2 million 
E)  None of these 
A)  $6 million 
B)  $17 million 
C)  $3 million 
D)  $2 million 
E)  None of these

Question 4

Aardvark is a small pest-control business that has 30 employees. The company started business within the past year and needs to make a decision on how best to make sure its finances are managed well as the company continues to grow its customer base and its business. Which of the following questions would be least relevant to a controller as he or she develops a financial forecast for Aardvark?

Accepted Answer

A)  What are the future plans of the company? 
B)  What is the current state of the local economy? 
C)  What is the future state of the local economy likely to be? 
D)  What subcontractors should the company use? 
E)  What is the company's competition likely to do? 
A)  What are the future plans of the company? 
B)  What is the current state of the local economy? 
C)  What is the future state of the local economy likely to be? 
D)  What subcontractors should the company use? 
E)  What is the company's competition likely to do?

Question 5

Julie, a recent college graduate, is interested in business and is considering pursuing a career in accounting. Her parents are supportive, with her mother recommending that Julie become a public accountant and her father recommending that she become a private accountant. Which of the following, if true, supports the father's position?

Accepted Answer

A)  Julie has said she wants to work for one of the accounting firms like Ernst & Young. 
B)  The demand for external auditors is expected to grow in the near future. 
C)  Many accountants flooded the job market when the Arthur Andersen firm went out of business. 
D)  Accountants for nonprofits are more concerned with efficiency than with profit. 
E)  Julie has said that she wants to work as an in-house accountant for a large public interest group like Sierra Club or Greenpeace. 
A)  Julie has said she wants to work for one of the accounting firms like Ernst & Young. 
B)  The demand for external auditors is expected to grow in the near future. 
C)  Many accountants flooded the job market when the Arthur Andersen firm went out of business. 
D)  Accountants for nonprofits are more concerned with efficiency than with profit. 
E)  Julie has said that she wants to work as an in-house accountant for a large public interest group like Sierra Club or Greenpeace.

Question 6

Aardvark is a small pest-control business that has 30 employees. The company started business within the past year and needs to make a decision on how best to make sure its finances are managed well as the company continues to grow its customer base and its business. Which of the following, if true, would not strengthen the case for Aardvark's closely monitoring its cash flow?

Accepted Answer

A)  The company needs to make sure it is not spending too much. 
B)  The company needs to make sure it is generating enough revenue. 
C)  The company needs to make sure its employees perform well. 
D)  The company needs to make sure it can always pay its bills. 
E)  The company needs to make sure it can make capital expenditures. 
A)  The company needs to make sure it is not spending too much. 
B)  The company needs to make sure it is generating enough revenue. 
C)  The company needs to make sure its employees perform well. 
D)  The company needs to make sure it can always pay its bills. 
E)  The company needs to make sure it can make capital expenditures.

Question 7

Activity ratios are used to determine the amount of sales the company generates each year.

Accepted Answer

A) True 
 B)False

Question 8

Martin is a salaried accountant who has been hired by Lexar Corp. to carry out its day-to-day financial activities. Martin is a(n)

Accepted Answer

A)  public accountant. 
B)  auditor. 
C)  controller. 
D)  private accountant. 
E)  advisor. 
A)  public accountant. 
B)  auditor. 
C)  controller. 
D)  private accountant. 
E)  advisor.

Question 9

List four trends that are contributing to additional roles for the modern accountant.

Accepted Answer

(1) Fewer restrictions from physical and

Question 10

Which of the following is correct with respect to the issue of owners' equity?

Accepted Answer

A)  It is the amount of cash listed on the balance sheet. 
B)  It is the amount of money the owners would receive if they sold all of a company's assets and paid all of its liabilities. 
C)  If a company's assets exceed its liabilities, owners' equity equals $10 000 for each dollar of assets. 
D)  If a company's liabilities exceed its assets, owners' equity equals minus $10 000 for each dollar of liabilities. 
E)  All of these are correct. 
A)  It is the amount of cash listed on the balance sheet. 
B)  It is the amount of money the owners would receive if they sold all of a company's assets and paid all of its liabilities. 
C)  If a company's assets exceed its liabilities, owners' equity equals $10 000 for each dollar of assets. 
D)  If a company's liabilities exceed its assets, owners' equity equals minus $10 000 for each dollar of liabilities. 
E)  All of these are correct.

Question 11

Bookkeeping is basically the recording of accounting transactions.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements best describes the difference between current and long-term liabilities?

Accepted Answer

A)  Current liabilities are debts that need to be paid immediately, whereas long-term liabilities do not. 
B)  Current liabilities are those which will cost less in debt interest than long-term liabilities. 
C)  Current liabilities are debts that are settled sooner than long-term debts. 
D)  Current liabilities are debts on tangible assets, whereas long-term liabilities are debts on intangible assets. 
E)  Current liabilities are debts on current assets, whereas long-term liabilities are debts on fixed and intangible assets. 
A)  Current liabilities are debts that need to be paid immediately, whereas long-term liabilities do not. 
B)  Current liabilities are those which will cost less in debt interest than long-term liabilities. 
C)  Current liabilities are debts that are settled sooner than long-term debts. 
D)  Current liabilities are debts on tangible assets, whereas long-term liabilities are debts on intangible assets. 
E)  Current liabilities are debts on current assets, whereas long-term liabilities are debts on fixed and intangible assets.

Question 13

A company has $3.25 million in revenue and has a revenue cost of $1 million. Which of the following statements is true?

Accepted Answer

A)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.25 million. 
B)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.75 million. 
C)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $1.75 million. 
D)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.25 million. 
E)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.75 million. 
A)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.25 million. 
B)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $0.75 million. 
C)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $1.75 million. 
D)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.25 million. 
E)  In order to have a net income of more than $1.5 million, the operating expenses and income taxes need to be less than $2.75 million.

Question 14

A company ends the year with a net income of $7.5 million and earnings per share of $1.50. What is the number of common shares outstanding for this company?

Accepted Answer

A)  3 million 
B)  4.5 million 
C)  5 million 
D)  6.5 million 
E)  11.25 million 
A)  3 million 
B)  4.5 million 
C)  5 million 
D)  6.5 million 
E)  11.25 million

Question 15

An account receivable represents

Accepted Answer

A)  an asset with long-term use or value, such as land, buildings, and equipment. 
B)  an amount due from a customer who has purchased goods on credit. 
C)  an expense, such as rent, that is paid before the upcoming period in which it is due. 
D)  a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit. 
E)  an asset that can or will be converted to cash within the following year. 
A)  an asset with long-term use or value, such as land, buildings, and equipment. 
B)  an amount due from a customer who has purchased goods on credit. 
C)  an expense, such as rent, that is paid before the upcoming period in which it is due. 
D)  a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit. 
E)  an asset that can or will be converted to cash within the following year.

Question 16

Accounting and bookkeeping are essentially synonymous.

Accepted Answer

A) True 
 B)False

Question 17

An asset is

Accepted Answer

A)  the amount of money originally invested in a business by its owners. 
B)  the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities. 
C)  the profits earned by and reinvested in the company. 
D)  any economic resource expected to benefit a firm or an individual who owns it. 
E)  a debt owed by a firm to an outside organization or individual. 
A)  the amount of money originally invested in a business by its owners. 
B)  the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities. 
C)  the profits earned by and reinvested in the company. 
D)  any economic resource expected to benefit a firm or an individual who owns it. 
E)  a debt owed by a firm to an outside organization or individual.

Question 18

Define the term current assets as found on a balance sheet.

Accepted Answer

Current assets inclu

Question 19

What is the formula for return on equity?

Accepted Answer

Net income

Question 20

What is goodwill?

Accepted Answer

Goodwill is the amou

________ are non-physical assets, such as a patent or trademark, that have economic value in the form of expected benefits.

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory. Maggie purchased an additional $5500 in antiques and sold all but $7500. What is Maggie's cost of goods sold?

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's operating income?

Activity ratios are used to determine the amount of sales the company generates each year.

Martin is a salaried accountant who has been hired by Lexar Corp. to carry out its day-to-day financial activities. Martin is a(n)

List four trends that are contributing to additional roles for the modern accountant.

Which of the following is correct with respect to the issue of owners' equity?

Bookkeeping is basically the recording of accounting transactions.

Which of the following statements best describes the difference between current and long-term liabilities?

A company has $3.25 million in revenue and has a revenue cost of $1 million. Which of the following statements is true?

A company ends the year with a net income of $7.5 million and earnings per share of $1.50. What is the number of common shares outstanding for this company?

An account receivable represents

Accounting and bookkeeping are essentially synonymous.

An asset is

Define the term current assets as found on a balance sheet.

What is the formula for return on equity?

What is goodwill?

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Finacial Decisions and Risk Management

Filters

Exam 11: Understanding Accounting

________ are non-physical assets, such as a patent or trademark, that have economic value in the form of expected benefits.

Maggie's Antiques and Collectibles opened with $14 000 beginning inventory. Maggie purchased an additional $5500 in antiques and sold all but $7500. What is Maggie's cost of goods sold?

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's operating income?

Activity ratios are used to determine the amount of sales the company generates each year.

Martin is a salaried accountant who has been hired by Lexar Corp. to carry out its day-to-day financial activities. Martin is a(n)

List four trends that are contributing to additional roles for the modern accountant.

Which of the following is correct with respect to the issue of owners' equity?

Bookkeeping is basically the recording of accounting transactions.

Which of the following statements best describes the difference between current and long-term liabilities?

A company has $3.25 million in revenue and has a revenue cost of $1 million. Which of the following statements is true?

A company ends the year with a net income of $7.5 million and earnings per share of $1.50. What is the number of common shares outstanding for this company?

An account receivable represents

Accounting and bookkeeping are essentially synonymous.

An asset is

Define the term current assets as found on a balance sheet.

What is the formula for return on equity?

What is goodwill?

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Finacial Decisions and Risk Management

Filters