Question 1

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Accepted Answer

A)  national bookkeeping standards 
B)  core competencies for accounting 
C)  accounting and financial rules 
D)  national guidelines of accounting principles 
E)  generally accepted accounting principles 
A)  national bookkeeping standards 
B)  core competencies for accounting 
C)  accounting and financial rules 
D)  national guidelines of accounting principles 
E)  generally accepted accounting principles E

Question 2

Which of the following, if True, would strengthen the case that Streeter & Sons is profitable?

Accepted Answer

A)  The company's sales revenue is low relative to its cost of goods sold. 
B)  The company's cost of goods sold is low relative to its sales revenue. 
C)  The company has had the same number of customers for some time. 
D)  The company has had the same owners over its lifetime. 
E)  The company's selling expenses are high relative to its administrative expenses. 
A)  The company's sales revenue is low relative to its cost of goods sold. 
B)  The company's cost of goods sold is low relative to its sales revenue. 
C)  The company has had the same number of customers for some time. 
D)  The company has had the same owners over its lifetime. 
E)  The company's selling expenses are high relative to its administrative expenses. B

Question 3

Which of the following, if True, would NOT strengthen the case that Aardvark needs to hire a full-time controller?

Accepted Answer

A)  The company needs its cash flow to be continuously monitored. 
B)  The company needs to determine how to market its products so as to reach the largest number of customers. 
C)  The company needs to have its excess funds invested in high-growth opportunities. 
D)  The company needs to have financial goals mapped out for it. 
E)  The company needs to have good sources of funding identified. 
A)  The company needs its cash flow to be continuously monitored. 
B)  The company needs to determine how to market its products so as to reach the largest number of customers. 
C)  The company needs to have its excess funds invested in high-growth opportunities. 
D)  The company needs to have financial goals mapped out for it. 
E)  The company needs to have good sources of funding identified. B

Question 4

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

Accepted Answer

A)  asset 
B)  owners' equity 
C)  inventory 
D)  liability 
E)  credit 
A)  asset 
B)  owners' equity 
C)  inventory 
D)  liability 
E)  credit

Question 5

What distinguishes the two most commonly used categories of owners' equity?

Accepted Answer

A)  the amount of equity within each type of asset-current versus fixed and intangible 
B)  the financial form of the equity-cash investments versus stock and bond investments 
C)  the source of the equity-investments versus earnings 
D)  the use of the equity-invested versus saved 
E)  the age of the equity-older investments and earnings versus newer investments and earnings 
A)  the amount of equity within each type of asset-current versus fixed and intangible 
B)  the financial form of the equity-cash investments versus stock and bond investments 
C)  the source of the equity-investments versus earnings 
D)  the use of the equity-invested versus saved 
E)  the age of the equity-older investments and earnings versus newer investments and earnings

Question 6

A long-term ratio of 2:3 indicates that the company has more equity than debt by a half.

Accepted Answer

A) True 
 B)False

Question 7

What is a leveraged buyout?

Accepted Answer

In a leveraged buyout, a firm takes on s

Question 8

If a company's assets exceed its liabilities, owners' equity is negative.

Accepted Answer

A) True 
 B)False

Question 9

A company ends the year with a net income of $7.5 million and an earnings per share value 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 10

A large company specializing in bread baking has made its annual balance sheet available to its investors. Profits were slightly lower than expected this year. Which of the following items does NOT need to be included in this statement in order to fulfill the principle of full disclosure?

Accepted Answer

A)  The current rise of local micro-bakeries has not affected and probably will not affect the revenue of the company. 
B)  The company is contemplating a merger with another major baking company. 
C)  Much of the loss of profits can be explained by the sudden rise in the price of wheat during the past year. 
D)  A baking start-up company founded by some former executives of the company looks like it will be a major competitor in the upcoming years. 
E)  The company and the union for its workers were able to halt a labor strike by negotiating increased health benefits for its workers, causing a slight increase in operating costs. 
A)  The current rise of local micro-bakeries has not affected and probably will not affect the revenue of the company. 
B)  The company is contemplating a merger with another major baking company. 
C)  Much of the loss of profits can be explained by the sudden rise in the price of wheat during the past year. 
D)  A baking start-up company founded by some former executives of the company looks like it will be a major competitor in the upcoming years. 
E)  The company and the union for its workers were able to halt a labor strike by negotiating increased health benefits for its workers, causing a slight increase in operating costs.

Question 11

Which of the following is the difference between revenues and the cost of revenues?

Accepted Answer

A)  net income 
B)  gross profit 
C)  accounts payable 
D)  interest expense 
E)  cash flow 
A)  net income 
B)  gross profit 
C)  accounts payable 
D)  interest expense 
E)  cash flow

Question 12

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, how are these transactions supposed to be recognized in the financial statements?

Accepted Answer

There are two conditions that must exist

Question 13

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 14

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

Accepted Answer

A) True 
 B)False

Question 15

A company ends the year with a banker's ratio of 5.3. How much current liabilities does it have if its current asset total is $15.3 million?

Accepted Answer

A)  $3.1 million 
B)  $5.1 million 
C)  $10.1 million 
D)  $10.2 million 
E)  $15.1 million 
A)  $3.1 million 
B)  $5.1 million 
C)  $10.1 million 
D)  $10.2 million 
E)  $15.1 million

Question 16

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

Accepted Answer

A)  $2 million 
B)  $3 million 
C)  $5 million 
D)  $7 million 
E)  $8 million 
A)  $2 million 
B)  $3 million 
C)  $5 million 
D)  $7 million 
E)  $8 million

Question 17

Which organization provides guidelines for ethical conduct for the accounting profession?

Accepted Answer

A)  AICPA 
B)  SEC 
C)  GAAP 
D)  FASB 
E)  CMA 
A)  AICPA 
B)  SEC 
C)  GAAP 
D)  FASB 
E)  CMA

Question 18

Which of the following, if True, would strengthen the case that Streeter & Sons will be able to meet its current financial obligations?

Accepted Answer

A)  The company has high levels of accounts payable. 
B)  The company's liabilities exceed its assets. 
C)  The company currently has a negative cash flow. 
D)  The company needs to expand its number of customers. 
E)  The company has more assets than it has liabilities. 
A)  The company has high levels of accounts payable. 
B)  The company's liabilities exceed its assets. 
C)  The company currently has a negative cash flow. 
D)  The company needs to expand its number of customers. 
E)  The company has more assets than it has liabilities.

Question 19

Which of the following is NOT an unethical or illegal accounting action?

Accepted Answer

A)  hiding expenses 
B)  underreporting liabilities 
C)  overestimating depreciation value of equipment 
D)  inflating revenues 
E)  maximizing the value of a company's intangible assets 
A)  hiding expenses 
B)  underreporting liabilities 
C)  overestimating depreciation value of equipment 
D)  inflating revenues 
E)  maximizing the value of a company's intangible assets

Question 20

What is the accounting equation?

Accepted Answer

assets = liabilities + owners'

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Which of the following, if True, would strengthen the case that Streeter & Sons is profitable?

Which of the following, if True, would NOT strengthen the case that Aardvark needs to hire a full-time controller?

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

What distinguishes the two most commonly used categories of owners' equity?

A long-term ratio of 2:3 indicates that the company has more equity than debt by a half.

What is a leveraged buyout?

If a company's assets exceed its liabilities, owners' equity is negative.

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

A large company specializing in bread baking has made its annual balance sheet available to its investors. Profits were slightly lower than expected this year. Which of the following items does NOT need to be included in this statement in order to fulfill the principle of full disclosure?

Which of the following is the difference between revenues and the cost of revenues?

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

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

A company ends the year with a banker's ratio of 5.3. How much current liabilities does it have if its current asset total is $15.3 million?

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

Which organization provides guidelines for ethical conduct for the accounting profession?

Which of the following, if True, would strengthen the case that Streeter & Sons will be able to meet its current financial obligations?

Which of the following is NOT an unethical or illegal accounting action?

What is the accounting equation?

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Exam 14: The Role of Accountants and Accounting Information

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Which of the following, if True, would strengthen the case that Streeter & Sons is profitable?

Which of the following, if True, would NOT strengthen the case that Aardvark needs to hire a full-time controller?

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

What distinguishes the two most commonly used categories of owners' equity?

A long-term ratio of 2:3 indicates that the company has more equity than debt by a half.

What is a leveraged buyout?

If a company's assets exceed its liabilities, owners' equity is negative.

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

A large company specializing in bread baking has made its annual balance sheet available to its investors. Profits were slightly lower than expected this year. Which of the following items does NOT need to be included in this statement in order to fulfill the principle of full disclosure?

Which of the following is the difference between revenues and the cost of revenues?

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

The primary goal for the standard practices and principles in accountant reporting is to ensure external users that the information is accurate and has meaning.

A company ends the year with a banker's ratio of 5.3. How much current liabilities does it have if its current asset total is $15.3 million?

How much profit does a company which has a total of $5 million invested by its owners and $4 million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1?

Which organization provides guidelines for ethical conduct for the accounting profession?

Which of the following, if True, would strengthen the case that Streeter & Sons will be able to meet its current financial obligations?

Which of the following is NOT an unethical or illegal accounting action?

What is the accounting equation?

The Us 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

Information Technology for Business

Money and Banking

Managing Finances

Filters