Question 1

Cash is the most liquid asset.

Accepted Answer

A) True 
 B)False

Question 2

Marla is a private accountants who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

Accepted Answer

A) True 
 B)False

Question 3

The basic formula used for the income statement is

Accepted Answer

A)  profit plus revenues equals expenses. 
B)  revenue minus expenses equals profit. 
C)  expenses plus profit equals revenue. 
D)  expenses plus revenues equals profit. 
E)  revenue minus profits equals expenses. 
A)  profit plus revenues equals expenses. 
B)  revenue minus expenses equals profit. 
C)  expenses plus profit equals revenue. 
D)  expenses plus revenues equals profit. 
E)  revenue minus profits equals expenses.

Question 4

Accounts 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 5

Jeremy identifies problems and helps managers carry out planning,decision making,and controlling functions.Jeremy works in the field of

Accepted Answer

A)  managerial accounting. 
B)  generally accepted accounting principles. 
C)  financial accounting. 
D)  budgeting. 
E)  auditing. 
A)  managerial accounting. 
B)  generally accepted accounting principles. 
C)  financial accounting. 
D)  budgeting. 
E)  auditing.

Question 6

The total cost of obtaining materials for making products sold by a firm during the year is

Accepted Answer

A)  cost of goods sold. 
B)  operating expense. 
C)  merchandise inventory. 
D)  net merchandise inventory. 
E)  administrative expense. 
A)  cost of goods sold. 
B)  operating expense. 
C)  merchandise inventory. 
D)  net merchandise inventory. 
E)  administrative expense.

Question 7

LJD is a CA firm.What three services does it likely provide?

Accepted Answer

A)  Ratio analysis,journal preparation,and ledger preparation 
B)  Tax services,budget preparation,and ratio analysis 
C)  Audit services,ratio analysis and tax collection 
D)  Tax services,audit services,and management services 
E)  Owners' equity analysis,journal and ledger preparation,and tax collection 
A)  Ratio analysis,journal preparation,and ledger preparation 
B)  Tax services,budget preparation,and ratio analysis 
C)  Audit services,ratio analysis and tax collection 
D)  Tax services,audit services,and management services 
E)  Owners' equity analysis,journal and ledger preparation,and tax collection

Question 8

The most important user of accounting information is the government.

Accepted Answer

A) True 
 B)False

Question 9

Accountants have historically used generally accepted accounting principles when preparing financial reports,but in 2011 many companies switched to the new international accounting standards.

Accepted Answer

A) True 
 B)False

Question 10

Identify an activity ratio and what it measures.

Accepted Answer

- activity: measures management's effici

Question 11

When a Canadian company imports a product from a Swiss company,it has to take into consideration foreign currency exchange rates.

Accepted Answer

A) True 
 B)False

Question 12

What is the difference between current and long-term liabilities?

Accepted Answer

Current liabilities are debts

Question 13

Which of the following is correct with regard to private accountants?

Accepted Answer

A)  They are hired by business firms who do not want to use the services of CAs or CGAs. 
B)  They are employed by business firms in areas such as marketing research,law,and production technology. 
C)  They are becoming less common as CAs,CGAs,and CMAs become more prominent and skilled. 
D)  They are almost exclusively found at the head office of business firms. 
E)  They are hired to deal with the day-to-day accounting needs of companies. 
A)  They are hired by business firms who do not want to use the services of CAs or CGAs. 
B)  They are employed by business firms in areas such as marketing research,law,and production technology. 
C)  They are becoming less common as CAs,CGAs,and CMAs become more prominent and skilled. 
D)  They are almost exclusively found at the head office of business firms. 
E)  They are hired to deal with the day-to-day accounting needs of companies.

Question 14

Short-term solvency ratios are used to measure the profitability of a business firm.

Accepted Answer

A) True 
 B)False

Question 15

The ________ principle requires that financial statements include not only numbers,but also management's interpretations and explanations of those figures.

Accepted Answer

A)  full disclosure 
B)  materiality 
C)  compliance 
D)  revenue recognition 
E)  matching 
A)  full disclosure 
B)  materiality 
C)  compliance 
D)  revenue recognition 
E)  matching

Question 16

________ provides cost information for engineers making product or process improvements.

Accepted Answer

A)  Government accounting 
B)  Minor accounting 
C)  Stock market accounting 
D)  Managerial accounting 
E)  Financial accounting 
A)  Government accounting 
B)  Minor accounting 
C)  Stock market accounting 
D)  Managerial accounting 
E)  Financial accounting

Question 17

The financial statement that summarizes a firm's assets,liabilities,and owners' equity is the

Accepted Answer

A)  income statement. 
B)  statement of cash flows. 
C)  balance sheet. 
D)  manufacturing statement. 
E)  statement of retained earnings. 
A)  income statement. 
B)  statement of cash flows. 
C)  balance sheet. 
D)  manufacturing statement. 
E)  statement of retained earnings.

Question 18

Leverage measures the ability of the firm to pay bills as they come due.

Accepted Answer

A) True 
 B)False

Question 19

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

Accepted Answer

A)  $50 million 
B)  $5 million 
C)  $45 million 
D)  $90 million 
E)  $95 million 
A)  $50 million 
B)  $5 million 
C)  $45 million 
D)  $90 million 
E)  $95 million

Question 20

How does a current asset differ from a fixed asset?

Accepted Answer

- a current asset is cash and other asse

Cash is the most liquid asset.

Marla is a private accountants who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

The basic formula used for the income statement is

Accounts receivable represents

Jeremy identifies problems and helps managers carry out planning,decision making,and controlling functions.Jeremy works in the field of

The total cost of obtaining materials for making products sold by a firm during the year is

LJD is a CA firm.What three services does it likely provide?

The most important user of accounting information is the government.

Accountants have historically used generally accepted accounting principles when preparing financial reports,but in 2011 many companies switched to the new international accounting standards.

Identify an activity ratio and what it measures.

When a Canadian company imports a product from a Swiss company,it has to take into consideration foreign currency exchange rates.

What is the difference between current and long-term liabilities?

Which of the following is correct with regard to private accountants?

Short-term solvency ratios are used to measure the profitability of a business firm.

The ________ principle requires that financial statements include not only numbers,but also management's interpretations and explanations of those figures.

________ provides cost information for engineers making product or process improvements.

The financial statement that summarizes a firm's assets,liabilities,and owners' equity is the

Leverage measures the ability of the firm to pay bills as they come due.

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

How does a current asset differ from a fixed asset?

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

Cash is the most liquid asset.

Marla is a private accountants who uses a six-step process to develop and analyze a company's financial reports.The first step in the process is to do a trial balance.

The basic formula used for the income statement is

Accounts receivable represents

Jeremy identifies problems and helps managers carry out planning,decision making,and controlling functions.Jeremy works in the field of

The total cost of obtaining materials for making products sold by a firm during the year is

LJD is a CA firm.What three services does it likely provide?

The most important user of accounting information is the government.

Accountants have historically used generally accepted accounting principles when preparing financial reports,but in 2011 many companies switched to the new international accounting standards.

Identify an activity ratio and what it measures.

When a Canadian company imports a product from a Swiss company,it has to take into consideration foreign currency exchange rates.

What is the difference between current and long-term liabilities?

Which of the following is correct with regard to private accountants?

Short-term solvency ratios are used to measure the profitability of a business firm.

The ________ principle requires that financial statements include not only numbers,but also management's interpretations and explanations of those figures.

________ provides cost information for engineers making product or process improvements.

The financial statement that summarizes a firm's assets,liabilities,and owners' equity is the

Leverage measures the ability of the firm to pay bills as they come due.

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

How does a current asset differ from a fixed asset?

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