Question 1

Max Corp.has total assets of $100 million and total liabilities of $30 million.Last year it earned a profit of $3 million.What is owners' equity at Max Corp.?

Accepted Answer

A)  $3 million 
B)  $100 million 
C)  $103 million 
D)  $73 million 
E)  $70 million 
A)  $3 million 
B)  $100 million 
C)  $103 million 
D)  $73 million 
E)  $70 million

Question 2

What is a statement of cash flows?

Accepted Answer

A statement of cash

Question 3

If current assets are $10 000 and current liabilities are $5000,the current ratio is 0.5.

Accepted Answer

A) True 
 B)False

Question 4

Net income divided by total owners' equity shows the return on equity for the owners.

Accepted Answer

A) True 
 B)False

Question 5

Gross profit percentages don't vary much across industries,with most companies making about 6 percent.

Accepted Answer

A) True 
 B)False

Question 6

The income statement details a firm's yearly cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 7

A fixed asset is

Accepted Answer

A)  an amount due from a customer who has purchased goods on credit. 
B)  an asset with long-term use or value,such as land,buildings,and equipment. 
C)  an expense,such as rent,that is paid before the upcoming period in which it is due. 
D)  an asset that can or will be converted to cash within the following year. 
E)  a nonphysical asset,such as a patent or trademark,that has economic value in the form of an expected benefit. 
A)  an amount due from a customer who has purchased goods on credit. 
B)  an asset with long-term use or value,such as land,buildings,and equipment. 
C)  an expense,such as rent,that is paid before the upcoming period in which it is due. 
D)  an asset that can or will be converted to cash within the following year. 
E)  a nonphysical asset,such as a patent or trademark,that has economic value in the form of an expected benefit.

Question 8

Assets = liabilities plus owners' equity.

Accepted Answer

A) True 
 B)False

Question 9

The process of informing interested groups outside the firm about the financial condition of the firm is known as

Accepted Answer

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

Question 10

Financial and managerial accounting can be distinguished by the different users they serve.

Accepted Answer

A) True 
 B)False

Question 11

What services does a CA provide? Provide a brief explanation of each service.

Accepted Answer

- auditing: examination of a company's f

Question 12

Realm Company has fixed assets of $4 billion,current assets of $1.7 billion,long-term liabilities of $2 billion,and current liabilities of $0.34 billion.What is Realm's current ratio?

Accepted Answer

A)  2 
B)  5 
C)  5.88 
D)  5.1 
E)  6.33 
A)  2 
B)  5 
C)  5.88 
D)  5.1 
E)  6.33

Question 13

A(n)_____ ratio evaluates management's use of assets.

Accepted Answer

A)  financial 
B)  solvency 
C)  activity 
D)  profitability 
E)  liability 
A)  financial 
B)  solvency 
C)  activity 
D)  profitability 
E)  liability

Question 14

Maggie's Antiques and Collectibles opened her store with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

Accepted Answer

A)  $27 000 
B)  $12 000 
C)  $19 500 
D)  $13 000 
E)  none of these 
A)  $27 000 
B)  $12 000 
C)  $19 500 
D)  $13 000 
E)  none of these

Question 15

What are the three types of assets that will normally be found on a balance sheet?

Accepted Answer

A)  Local,national,and international 
B)  Positive,negative,and neutral 
C)  Land,buildings,and equipment 
D)  Current,fixed,and intangible 
E)  Short-term,long-term,and medium-term 
A)  Local,national,and international 
B)  Positive,negative,and neutral 
C)  Land,buildings,and equipment 
D)  Current,fixed,and intangible 
E)  Short-term,long-term,and medium-term

Question 16

Jerry wants to calculate gross profit.Which formula should he use?

Accepted Answer

A)  Operating expenses minus income taxes 
B)  Sales revenue minus income taxes 
C)  Sales revenue minus operating expenses 
D)  Sales revenue minus cost of goods sold 
E)  Sales revenue plus operating expenses. 
A)  Operating expenses minus income taxes 
B)  Sales revenue minus income taxes 
C)  Sales revenue minus operating expenses 
D)  Sales revenue minus cost of goods sold 
E)  Sales revenue plus operating expenses.

Question 17

One manager (Adam)says that the income statement should be strong this year because the company has achieved a high level of sales revenue.Another manager (Eve)says that even with strong sales revenue,the income statement might not look particularly good.What is the flaw in Adam's reasoning?

Accepted Answer

A)  He is not taking into accounting all of the possible sources of revenue for the company. 
B)  He is not including owners' equity as part of sales revenue. 
C)  He is saying that the income statement is not as important as the balance sheet in portraying a company's fiscal health. 
D)  He knows that many employees are dissatisfied with the direction the company is taking. 
E)  He is not accounting for the effect that expenses will have on the income statement. 
A)  He is not taking into accounting all of the possible sources of revenue for the company. 
B)  He is not including owners' equity as part of sales revenue. 
C)  He is saying that the income statement is not as important as the balance sheet in portraying a company's fiscal health. 
D)  He knows that many employees are dissatisfied with the direction the company is taking. 
E)  He is not accounting for the effect that expenses will have on the income statement.

Question 18

David is a salaried accountant who has been hired by Lexar Corp.to carry out its day-to-day financial activities.David is a(n)

Accepted Answer

A)  public accountant. 
B)  auditor. 
C)  controller. 
D)  private accountant. 
E)  advisor. 
A)  public accountant. 
B)  auditor. 
C)  controller. 
D)  private accountant. 
E)  advisor.

Question 19

David is preparing a statement of estimated profits and losses for a new product that has just been introduced by his company.The field of accounting that David is working in is

Accepted Answer

A)  managerial accounting. 
B)  auditing. 
C)  public accounting. 
D)  financial accounting. 
E)  bookkeeping. 
A)  managerial accounting. 
B)  auditing. 
C)  public accounting. 
D)  financial accounting. 
E)  bookkeeping.

Question 20

What is an audit?

Accepted Answer

An audit is a systematic exami

Max Corp.has total assets of $100 million and total liabilities of $30 million.Last year it earned a profit of $3 million.What is owners' equity at Max Corp.?

What is a statement of cash flows?

If current assets are $10 000 and current liabilities are $5000,the current ratio is 0.5.

Net income divided by total owners' equity shows the return on equity for the owners.

Gross profit percentages don't vary much across industries,with most companies making about 6 percent.

The income statement details a firm's yearly cash receipts and cash payments.

A fixed asset is

Assets = liabilities plus owners' equity.

The process of informing interested groups outside the firm about the financial condition of the firm is known as

Financial and managerial accounting can be distinguished by the different users they serve.

What services does a CA provide? Provide a brief explanation of each service.

Realm Company has fixed assets of $4 billion,current assets of $1.7 billion,long-term liabilities of $2 billion,and current liabilities of $0.34 billion.What is Realm's current ratio?

A(n)_____ ratio evaluates management's use of assets.

Maggie's Antiques and Collectibles opened her store with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

What are the three types of assets that will normally be found on a balance sheet?

Jerry wants to calculate gross profit.Which formula should he use?

One manager (Adam)says that the income statement should be strong this year because the company has achieved a high level of sales revenue.Another manager (Eve)says that even with strong sales revenue,the income statement might not look particularly good.What is the flaw in Adam's reasoning?

David is a salaried accountant who has been hired by Lexar Corp.to carry out its day-to-day financial activities.David is a(n)

David is preparing a statement of estimated profits and losses for a new product that has just been introduced by his company.The field of accounting that David is working in is

What is an audit?

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

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Exam 14: Understanding Accounting Issues

Max Corp.has total assets of $100 million and total liabilities of $30 million.Last year it earned a profit of $3 million.What is owners' equity at Max Corp.?

What is a statement of cash flows?

If current assets are $10 000 and current liabilities are $5000,the current ratio is 0.5.

Net income divided by total owners' equity shows the return on equity for the owners.

Gross profit percentages don't vary much across industries,with most companies making about 6 percent.

The income statement details a firm's yearly cash receipts and cash payments.

A fixed asset is

Assets = liabilities plus owners' equity.

The process of informing interested groups outside the firm about the financial condition of the firm is known as

Financial and managerial accounting can be distinguished by the different users they serve.

What services does a CA provide? Provide a brief explanation of each service.

Realm Company has fixed assets of $4 billion,current assets of $1.7 billion,long-term liabilities of $2 billion,and current liabilities of $0.34 billion.What is Realm's current ratio?

A(n)_____ ratio evaluates management's use of assets.

Maggie's Antiques and Collectibles opened her store with $14 000 beginning inventory.Maggie purchased an additional $5500 in antiques and sold all but $7500.What is Maggie's cost of goods sold?

What are the three types of assets that will normally be found on a balance sheet?

Jerry wants to calculate gross profit.Which formula should he use?

One manager (Adam)says that the income statement should be strong this year because the company has achieved a high level of sales revenue.Another manager (Eve)says that even with strong sales revenue,the income statement might not look particularly good.What is the flaw in Adam's reasoning?

David is a salaried accountant who has been hired by Lexar Corp.to carry out its day-to-day financial activities.David is a(n)

David is preparing a statement of estimated profits and losses for a new product that has just been introduced by his company.The field of accounting that David is working in is

What is an audit?

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