Exam 14: The Role of Accountants and Accounting Information

The auditor's report has come back and Mary Ann is reviewing the financial statements. The current balance sheet shows that the business has more liabilities than assets. Why would this explain the need to sell the business?

Rolanda suggests that, even with the negative owners' equity, this business might still be worth buying. What other indicators within the auditor's report should they consider for this decision?

An asset is defined as any economic resource expected to benefit a firm or an individual who owns it.

A company with a very high amount of liabilities will always find it more difficult to secure loans than a company with a very low amount of liabilities.

It is currently very common that a CPA who is hired to audit a firm's finances will also be hired to help design a more efficient financial information system.

A key component of the Sarbanes-Oxley Act of 2002 was increased government oversight over the certification examinations given by the accounting professional organizations such as the Institute of Management Accountants.

Current assets refers to all assets that are able to be liquidated in a short amount of time.

The auditor has expressed concerns about the company's ability to pay its bills as they are due. What type of financial ratio might provide insight into this concern?

Which of the following, if True, would weaken the case that more than one type of financial statement should be examined in order to determine a company's financial health?

Which of the following refers to the financial statement detailing a firm's assets, liabilities, and owners' equity?

Which of the following, if True, supports the mother's position?

Which of the following does Michaels assume?

Which of the following statements BEST describes the need for global accounting standards?

Which of the following terms refers to the comprehensive system for collecting, analyzing, and communicating financial information?

For what types of organizations do forensic accountants work?

ABC Company has a net income of $5 million. ABC's number of outstanding shares of stock is 3,870,000 shares. What is the company's earnings per share?

Major projects such as corporate mergers or buyouts can adversely affect the long-term solvency ratio of a company.

Bennequin Accounting has been hired by XYZ Manufacturing to help plan its merger with ABC Distribution. Which of the following terms best describes the capacity for which Bennequin has been hired?

Revenues are reported when a sale is made.

Which of the following bodies formulates the generally accepted accounting principles ?