Question 1

Analyze the major postulates of the international financial reporting standards and conduct a class discussion on its relevance.

Accepted Answer

Students should form groups and prepare well before the discussion.
The discussion should include such issues as a comparison with GAAP and the significance of IFRS.
This is an activity to be performed in class.

Question 2

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

Accepted Answer

Activity ratios analyze how well a company is managing and making use of its assets.In this exercise,the students should calculate inventory turnover ratio and accounts receivable turnover ratio.
Inventory turnover ratio is a measure of the time a company takes to turn its inventory into sales,calculated by dividing cost of goods sold by the average value of inventory for a period.Accounts receivable turnover ratio is a measure of the time a company takes to turn its accounts receivable into cash,calculated by dividing sales by the average value of accounts receivable for a period.
Student answers will vary due to the nature of this exercise.

Question 3

A company has $20,000 cash and $100,000 worth of land.Other assets of the company amount to $300,000.The firm has an outstanding loan of $200,000 and other liabilities adding up to $25,000.What is the owner's equity of the company?

Accepted Answer

A)  $395,000 
B)  $95,000 
C)  $195,000 
D)  $175,000 
E)  $220,000 
A)  $395,000 
B)  $95,000 
C)  $195,000 
D)  $175,000 
E)  $220,000 C

Question 4

Most companies in the United States use international financial reporting standards (IFRS)to standardize accounting and financial reporting methods.

Accepted Answer

A) True 
 B)False

Question 5

Depreciation is an accounting procedure used for intangible assets.

Accepted Answer

A) True 
 B)False

Question 6

________ is a statement of a firm's financial position on a particular date and is known as a statement of financial position.

Accepted Answer

A)  Cash flow statement 
B)  Balance sheet 
C)  Income statement 
D)  Expense report 
E)  Profit and loss statement 
A)  Cash flow statement 
B)  Balance sheet 
C)  Income statement 
D)  Expense report 
E)  Profit and loss statement

Question 7

Identify the legislation that prohibits investment bankers from influencing stock analysts and requires CEOs and CFOs to sign statements attesting to the accuracy of their financial statements.

Accepted Answer

A)  Reconstruction Finance Corporation Act 
B)  Public Utility Company Act 
C)  Ethics in Government Act 
D)  Sarbanes-Oxley Act 
E)  Financial Services Modernization Act 
A)  Reconstruction Finance Corporation Act 
B)  Public Utility Company Act 
C)  Ethics in Government Act 
D)  Sarbanes-Oxley Act 
E)  Financial Services Modernization Act

Question 8

Which of the following terms refers to a formal evaluation of the fairness and reliability of a client's financial statements?

Accepted Answer

A)  cost accounting 
B)  audit 
C)  control 
D)  bookkeeping 
E)  management accounting 
A)  cost accounting 
B)  audit 
C)  control 
D)  bookkeeping 
E)  management accounting

Question 9

Describe the major provisions of the Sarbanes-Oxley Act.

Accepted Answer

The major provisions of the Sarbanes-Oxl

Question 10

Most countries outside of the United states use ________ to standardize their accounting practices.

Accepted Answer

A)  international financial reporting standards (IFRS) 
B)  generally accepted accounting principles (GAAP) 
C)  earnings before interest, taxes, depreciation, and amortization (EBITD
A)  
D)  internationally accepted accounting protocols (IAAP) 
E)  country-specific principles of accounting (CSPO
A)  
A)  international financial reporting standards (IFRS) 
B)  generally accepted accounting principles (GAAP) 
C)  earnings before interest, taxes, depreciation, and amortization (EBITD
A)  
D)  internationally accepted accounting protocols (IAAP) 
E)  country-specific principles of accounting (CSPO
A)

Question 11

Transferring net revenue and expense account balances to retained earnings for the period is referred to as closing the books.

Accepted Answer

A) True 
 B)False

Question 12

Bookkeeping refers to ________.

Accepted Answer

A)  the cost accounting component of accounting 
B)  analyzing financial information 
C)  preparing financial forecasts 
D)  the clerical aspect of accounting 
E)  performing profitability analysis for a company 
A)  the cost accounting component of accounting 
B)  analyzing financial information 
C)  preparing financial forecasts 
D)  the clerical aspect of accounting 
E)  performing profitability analysis for a company

Question 13

Accounts payable is an example of a long-term liability.

Accepted Answer

A) True 
 B)False

Question 14

Owners' equity refers to the total assets of a company.

Accepted Answer

A) True 
 B)False

Question 15

Statement of cash flows is a statement of a firm's cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a fixed asset?

Accepted Answer

A)  transportation equipment 
B)  money-market funds 
C)  cash in hand 
D)  accounts receivable 
E)  short-term investments 
A)  transportation equipment 
B)  money-market funds 
C)  cash in hand 
D)  accounts receivable 
E)  short-term investments

Question 17

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

Accepted Answer

A)  statement of financial position 
B)  balance sheet 
C)  cash flow statement 
D)  income statement 
E)  statement of current assets 
A)  statement of financial position 
B)  balance sheet 
C)  cash flow statement 
D)  income statement 
E)  statement of current assets

Question 18

The accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Accepted Answer

A) True 
 B)False

Question 19

Accrued expenses are expenses that ________.

Accepted Answer

A)  are likely to be incurred at a future time in a different financial year 
B)  have been incurred but for which bills have not yet been received 
C)  are long-term liabilities that have been incurred in a financial year 
D)  have been incurred and for which the bills have been received 
E)  are likely to be incurred at a future time in the same financial year 
A)  are likely to be incurred at a future time in a different financial year 
B)  have been incurred but for which bills have not yet been received 
C)  are long-term liabilities that have been incurred in a financial year 
D)  have been incurred and for which the bills have been received 
E)  are likely to be incurred at a future time in the same financial year

Question 20

Net sales - cost of goods sold = ________.

Accepted Answer

A)  working capital 
B)  current asset 
C)  gross profit 
D)  net profit 
E)  current liability 
A)  working capital 
B)  current asset 
C)  gross profit 
D)  net profit 
E)  current liability

Analyze the major postulates of the international financial reporting standards and conduct a class discussion on its relevance.

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

A company has $20,000 cash and $100,000 worth of land.Other assets of the company amount to $300,000.The firm has an outstanding loan of $200,000 and other liabilities adding up to $25,000.What is the owner's equity of the company?

Most companies in the United States use international financial reporting standards (IFRS)to standardize accounting and financial reporting methods.

Depreciation is an accounting procedure used for intangible assets.

________ is a statement of a firm's financial position on a particular date and is known as a statement of financial position.

Identify the legislation that prohibits investment bankers from influencing stock analysts and requires CEOs and CFOs to sign statements attesting to the accuracy of their financial statements.

Which of the following terms refers to a formal evaluation of the fairness and reliability of a client's financial statements?

Describe the major provisions of the Sarbanes-Oxley Act.

Most countries outside of the United states use ________ to standardize their accounting practices.

Transferring net revenue and expense account balances to retained earnings for the period is referred to as closing the books.

Bookkeeping refers to ________.

Accounts payable is an example of a long-term liability.

Owners' equity refers to the total assets of a company.

Statement of cash flows is a statement of a firm's cash receipts and cash payments.

Which of the following is an example of a fixed asset?

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

The accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Accrued expenses are expenses that ________.

Net sales - cost of goods sold = ________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

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Exam 17: Financial Information and Accounting Concepts

Analyze the major postulates of the international financial reporting standards and conduct a class discussion on its relevance.

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

A company has $20,000 cash and $100,000 worth of land.Other assets of the company amount to $300,000.The firm has an outstanding loan of $200,000 and other liabilities adding up to $25,000.What is the owner's equity of the company?

Most companies in the United States use international financial reporting standards (IFRS)to standardize accounting and financial reporting methods.

Depreciation is an accounting procedure used for intangible assets.

________ is a statement of a firm's financial position on a particular date and is known as a statement of financial position.

Identify the legislation that prohibits investment bankers from influencing stock analysts and requires CEOs and CFOs to sign statements attesting to the accuracy of their financial statements.

Which of the following terms refers to a formal evaluation of the fairness and reliability of a client's financial statements?

Describe the major provisions of the Sarbanes-Oxley Act.

Most countries outside of the United states use ________ to standardize their accounting practices.

Transferring net revenue and expense account balances to retained earnings for the period is referred to as closing the books.

Bookkeeping refers to ________.

Accounts payable is an example of a long-term liability.

Owners' equity refers to the total assets of a company.

Statement of cash flows is a statement of a firm's cash receipts and cash payments.

Which of the following is an example of a fixed asset?

Which of the following reports is best suited to analyze an organization's profitability over a period of time?

The accounts receivable turnover ratio is calculated by dividing sales by the average value of accounts receivable for a period.

Accrued expenses are expenses that ________.

Net sales - cost of goods sold = ________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Management

Financial Markets and Investment Strategies

The Money Supply and Banking Systems

Filters