Question 1

If Perry Enterprises has a debt ratio of 40 percent, it means that for every $1 in _____, the firm has 40 cents in _____.

Accepted Answer

A)  owners' equity; liabilities 
B)  assets; liabilities 
C)  owners' equity; assets 
D)  assets; owners' equity 
A)  owners' equity; liabilities 
B)  assets; liabilities 
C)  owners' equity; assets 
D)  assets; owners' equity

Question 2

A U.S. company with a subsidiary in France must restate the U.S. operations from U.S. dollars to euros.

Accepted Answer

A) True 
 B)False

Question 3

Cash budgets are usually prepared _____.

Accepted Answer

A)  yearly 
B)  quarterly 
C)  monthly 
D)  weekly 
A)  yearly 
B)  quarterly 
C)  monthly 
D)  weekly

Question 4

Last year, a firm had a current ratio of 2.0 and an acid-test ratio of 1.0. This year the firm's current ratio is 2.5 and its acid-test ratio is 1.5. This firm's _____ has _____.

Accepted Answer

A)  profitability; improved 
B)  profitability; deteriorated 
C)  liquidity; improved 
D)  liquidity; deteriorated 
A)  profitability; improved 
B)  profitability; deteriorated 
C)  liquidity; improved 
D)  liquidity; deteriorated

Question 5

The right side of the balance sheet lists claims against assets.

Accepted Answer

A) True 
 B)False

Question 6

Weston wants to assess his firm's ability to meet its short-term obligations. Which of the following ratios are the most relevant?

Accepted Answer

A)  Activity ratios 
B)  Debt ratios 
C)  Liquidity ratios 
D)  Profitability ratios 
A)  Activity ratios 
B)  Debt ratios 
C)  Liquidity ratios 
D)  Profitability ratios

Question 7

Explain the differences between public accountants and management accountants.

Accepted Answer

A public accountant provides accounting

Question 8

Miles is an accountant and works for a firm that provides tax planning and preparation services to other businesses. Miles is a management accountant.

Accepted Answer

A) True 
 B)False

Question 9

MATCHING
Complete the following using the terms listed.
-The accounting method that records revenues and expenses when they occur is called _____.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant

Question 10

MATCHING
Complete the following using the terms listed.
-The claims of a firm's creditors are a(n) _____.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant

Question 11

MATCHING
Complete the following using the terms listed.
-The _____ are regulations and interpretations adopted by the International Accounting Standards Board.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant

Question 12

Campbell Inc., a construction company, recorded a gross profit of $12,000. Its operating expenses stood at $2,000. The amount of depreciation was calculated to be $3,000. Campbell paid out $2,500 in income taxes. Which of the following figures captures Campbell's bottom line?

Accepted Answer

A)  $10,000 
B)  $4,500 
C)  $3,500 
D)  $7,000 
A)  $10,000 
B)  $4,500 
C)  $3,500 
D)  $7,000

Question 13

Accounting is the language of business.

Accepted Answer

A) True 
 B)False

Question 14

MATCHING
Complete the following using the terms listed.
-_____ measure the extent to which a firm relies on debt financing.

Accepted Answer

A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant 
A) certified public accountant 
B) International Financial Reporting Standards 
C) asset 
D) liability 
E) Owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Foreign Corruption Practices Act
J)accrual accounting
K)open book management
L)budget
M)generally accepted accounting principles (GAAP)
N)Financial Accounting Standards Board (FAS
B) 
O)profitability ratios
P)International Accounting Standards Committee (IAS
C) 
Q)Leverage ratios
r
management accountant

Question 15

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

Accepted Answer

A) True 
 B)False

Question 16

Profitability ratios measure a firm's ability to meet its short-term obligations.

Accepted Answer

A) True 
 B)False

Question 17

The natural progression of a business begins with operating the business.

Accepted Answer

A) True 
 B)False

Question 18

Diana asked her accountant to prepare a summary of the company's "bottom line." What specific information is Diana interested in?

Accepted Answer

A)  Comparison of assets and liabilities 
B)  The company's financial position for that week 
C)  Net income after taxes 
D)  Statement of owners' equity 
A)  Comparison of assets and liabilities 
B)  The company's financial position for that week 
C)  Net income after taxes 
D)  Statement of owners' equity

Question 19

Which of the following represents the accounting equation?

Accepted Answer

A)  Assets + Liabilities = Owners' Equity 
B)  Assets = Liabilities + Owners' Equity 
C)  Liabilities = Assets + Owners' Equity 
D)  Owners' Equity - Liabilities = Assets 
A)  Assets + Liabilities = Owners' Equity 
B)  Assets = Liabilities + Owners' Equity 
C)  Liabilities = Assets + Owners' Equity 
D)  Owners' Equity - Liabilities = Assets

Question 20

Accounting information can be as important to those outside the organization as it is to those inside the organization.

Accepted Answer

A) True 
 B)False

If Perry Enterprises has a debt ratio of 40 percent, it means that for every $1 in _, the firm has 40 cents in _.

A U.S. company with a subsidiary in France must restate the U.S. operations from U.S. dollars to euros.

Cash budgets are usually prepared _____.

Last year, a firm had a current ratio of 2.0 and an acid-test ratio of 1.0. This year the firm's current ratio is 2.5 and its acid-test ratio is 1.5. This firm's _ has _.

The right side of the balance sheet lists claims against assets.

Weston wants to assess his firm's ability to meet its short-term obligations. Which of the following ratios are the most relevant?

Explain the differences between public accountants and management accountants.

Miles is an accountant and works for a firm that provides tax planning and preparation services to other businesses. Miles is a management accountant.

MATCHING Complete the following using the terms listed. -The accounting method that records revenues and expenses when they occur is called _____.

MATCHING Complete the following using the terms listed. -The claims of a firm's creditors are a(n) _____.

MATCHING Complete the following using the terms listed. -The _____ are regulations and interpretations adopted by the International Accounting Standards Board.

Campbell Inc., a construction company, recorded a gross profit of $12,000. Its operating expenses stood at $2,000. The amount of depreciation was calculated to be $3,000. Campbell paid out $2,500 in income taxes. Which of the following figures captures Campbell's bottom line?

Accounting is the language of business.

MATCHING Complete the following using the terms listed. -_____ measure the extent to which a firm relies on debt financing.

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

Profitability ratios measure a firm's ability to meet its short-term obligations.

The natural progression of a business begins with operating the business.

Diana asked her accountant to prepare a summary of the company's "bottom line." What specific information is Diana interested in?

Which of the following represents the accounting equation?

Accounting information can be as important to those outside the organization as it is to those inside the organization.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Filters

Exam 15: Understanding Accounting and Financial Statements

If Perry Enterprises has a debt ratio of 40 percent, it means that for every $1 in _____, the firm has 40 cents in _____.

A U.S. company with a subsidiary in France must restate the U.S. operations from U.S. dollars to euros.

Cash budgets are usually prepared _____.

Last year, a firm had a current ratio of 2.0 and an acid-test ratio of 1.0. This year the firm's current ratio is 2.5 and its acid-test ratio is 1.5. This firm's _____ has _____.

The right side of the balance sheet lists claims against assets.

Weston wants to assess his firm's ability to meet its short-term obligations. Which of the following ratios are the most relevant?

Explain the differences between public accountants and management accountants.

Miles is an accountant and works for a firm that provides tax planning and preparation services to other businesses. Miles is a management accountant.

MATCHING Complete the following using the terms listed. -The accounting method that records revenues and expenses when they occur is called _____.

MATCHING Complete the following using the terms listed. -The claims of a firm's creditors are a(n) _____.

MATCHING Complete the following using the terms listed. -The _____ are regulations and interpretations adopted by the International Accounting Standards Board.

Campbell Inc., a construction company, recorded a gross profit of $12,000. Its operating expenses stood at $2,000. The amount of depreciation was calculated to be $3,000. Campbell paid out $2,500 in income taxes. Which of the following figures captures Campbell's bottom line?

Accounting is the language of business.

MATCHING Complete the following using the terms listed. -_____ measure the extent to which a firm relies on debt financing.

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

Profitability ratios measure a firm's ability to meet its short-term obligations.

The natural progression of a business begins with operating the business.

Diana asked her accountant to prepare a summary of the company's "bottom line." What specific information is Diana interested in?

Which of the following represents the accounting equation?

Accounting information can be as important to those outside the organization as it is to those inside the organization.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labor Relations

Top Performance Through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Filters

If Perry Enterprises has a debt ratio of 40 percent, it means that for every $1 in _, the firm has 40 cents in _.

Last year, a firm had a current ratio of 2.0 and an acid-test ratio of 1.0. This year the firm's current ratio is 2.5 and its acid-test ratio is 1.5. This firm's _ has _.