Question 1

What is the primary purpose of accounting?

Accepted Answer

A)  To determine when to sell the company 
B)  To determine the most effective plan to avoid a hostile takeover 
C)  To determine the value of the company before it is sold 
D)  To summarize the results of business transactions so that the resulting reports can be used in the decision-making process 
E)  To provide information for tax authorities 
A)  To determine when to sell the company 
B)  To determine the most effective plan to avoid a hostile takeover 
C)  To determine the value of the company before it is sold 
D)  To summarize the results of business transactions so that the resulting reports can be used in the decision-making process 
E)  To provide information for tax authorities

Question 2

Marlin wants to calculate the inventory turnover ratio for his company.He has the following information: beginning inventory = $30 000; ending inventory = $20 000; the cost of goods sold = $100 000.From this he concludes that the inventory turnover ratio is 4.0.

Accepted Answer

A) True 
 B)False

Question 3

Explain the accounting principles of revenue recognition and matching.

Accepted Answer

- revenue recognition: 
- the formal rec

Question 4

Arthur's primary responsibility as an auditor is

Accepted Answer

A)  publishing the audit report results in The Financial Post. 
B)  preparing budgets for the forthcoming year. 
C)  ensuring the firm's accounting practices adhere to generally accepted accounting principles. 
D)  collecting taxes. 
E)  determining that the company actually has the inventory that it says it has. 
A)  publishing the audit report results in The Financial Post. 
B)  preparing budgets for the forthcoming year. 
C)  ensuring the firm's accounting practices adhere to generally accepted accounting principles. 
D)  collecting taxes. 
E)  determining that the company actually has the inventory that it says it has.

Question 5

The three major categories of items shown on an income statement are revenues,cost of goods sold,and operating expenses.

Accepted Answer

A) True 
 B)False

Question 6

Paid-in capital is

Accepted Answer

A)  a debt that must be paid within the year. 
B)  the process of distributing the cost of an asset over its useful life. 
C)  the amount paid for an existing business above the value of its other assets. 
D)  a debt that is not due for at least one year. 
E)  additional money,above proceeds from a sale of shares,paid directly to a firm by its owners. 
A)  a debt that must be paid within the year. 
B)  the process of distributing the cost of an asset over its useful life. 
C)  the amount paid for an existing business above the value of its other assets. 
D)  a debt that is not due for at least one year. 
E)  additional money,above proceeds from a sale of shares,paid directly to a firm by its owners.

Question 7

What is the difference between financial and managerial accounting?

Accepted Answer

Financial accounting is concerned with p

Question 8

Which of the following calculates the debt-to-owners' equity ratio?

Accepted Answer

A)  Long-term liabilities divided by owners' equity 
B)  Current liabilities divided by owners' equity 
C)  Long-term liabilities divided by retained earnings 
D)  Total liabilities divided by retained earnings 
E)  Total liabilities divided by owners' equity 
A)  Long-term liabilities divided by owners' equity 
B)  Current liabilities divided by owners' equity 
C)  Long-term liabilities divided by retained earnings 
D)  Total liabilities divided by retained earnings 
E)  Total liabilities divided by owners' equity

Question 9

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 net income?

Accepted Answer

A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these 
A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these

Question 10

Which of the following formulas is used to calculate the cost of goods sold during the period?

Accepted Answer

A)  Beginning inventory plus purchases minus ending inventory 
B)  Ending inventory minus beginning inventory plus purchases 
C)  Purchases minus beginning inventory plus ending inventory 
D)  Beginning inventory plus ending inventory minus purchases 
E)  Ending inventory plus beginning inventory divided by two 
A)  Beginning inventory plus purchases minus ending inventory 
B)  Ending inventory minus beginning inventory plus purchases 
C)  Purchases minus beginning inventory plus ending inventory 
D)  Beginning inventory plus ending inventory minus purchases 
E)  Ending inventory plus beginning inventory divided by two

Question 11

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 gross profit?

Accepted Answer

A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these 
A)  $6 million 
B)  $17 million 
C)  $16 million 
D)  $2 million 
E)  None of these

Question 12

Al Rosen works as a private investigator of white-collar crimes.He is

Accepted Answer

A)  a GAAP accountant. 
B)  a financial scanner. 
C)  a whistleblower. 
D)  an auditor. 
E)  a forensic accountant. 
A)  a GAAP accountant. 
B)  a financial scanner. 
C)  a whistleblower. 
D)  an auditor. 
E)  a forensic accountant.

What is the primary purpose of accounting?

Marlin wants to calculate the inventory turnover ratio for his company.He has the following information: beginning inventory = $30 000; ending inventory = $20 000; the cost of goods sold = $100 000.From this he concludes that the inventory turnover ratio is 4.0.

Explain the accounting principles of revenue recognition and matching.

Arthur's primary responsibility as an auditor is

The three major categories of items shown on an income statement are revenues,cost of goods sold,and operating expenses.

Paid-in capital is

What is the difference between financial and managerial accounting?

Which of the following calculates the debt-to-owners' equity ratio?

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 net income?

Which of the following formulas is used to calculate the cost of goods sold during the period?

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 gross profit?

Al Rosen works as a private investigator of white-collar crimes.He is

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Money and Banking

Understanding Securities and Investments

Financial Decisions and Risk Management

Filters

Exam 14: Understanding Accounting Issues

What is the primary purpose of accounting?

Marlin wants to calculate the inventory turnover ratio for his company.He has the following information: beginning inventory = $30 000; ending inventory = $20 000; the cost of goods sold = $100 000.From this he concludes that the inventory turnover ratio is 4.0.

Explain the accounting principles of revenue recognition and matching.

Arthur's primary responsibility as an auditor is

The three major categories of items shown on an income statement are revenues,cost of goods sold,and operating expenses.

Paid-in capital is

What is the difference between financial and managerial accounting?

Which of the following calculates the debt-to-owners' equity ratio?

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 net income?

Which of the following formulas is used to calculate the cost of goods sold during the period?

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 gross profit?

Al Rosen works as a private investigator of white-collar crimes.He is

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Money and Banking

Understanding Securities and Investments

Financial Decisions and Risk Management

Filters