Question 1

Two commonly used liquidity ratios are the inventory turnover ratio and the leverage ratio.

Accepted Answer

A) True 
 B)False

Question 2

What is accrual accounting? How does depreciation affect net income and cash flow?

Accepted Answer

Accrual accounting recognizes revenues a

Question 3

A firm's balance sheet shows its financial position over a period of time.

Accepted Answer

A) True 
 B)False

Question 4

Investing activities focus on selling goods and services, but they also consider cost control as an important element of sound financial management.

Accepted Answer

A) True 
 B)False

Question 5

Daily business decisions are generally unaffected by accounting information; long-term decisions, however, are affected by accounting information and the interpretation of financial reports.

Accepted Answer

A) True 
 B)False

Question 6

An asset turnover ratio of 2.5 means that for every $1 in assets, the firm generates _____ in sales.

Accepted Answer

A)  $0.50 
B)  $2.00 
C)  $2.50 
D)  $3.00 
A)  $0.50 
B)  $2.00 
C)  $2.50 
D)  $3.00

Question 7

MATCHING
Complete the following using the terms listed.
-Proponents of _____ allow employees to view sensitive financial information so that they better understand how their work contributes to the company's success.

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 8

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues, operating expenses, and cash receipts and disbursements. Shane wants to create a(n) _____.

Accepted Answer

A)  sales forecast 
B)  statement of cash flows 
C)  income statement 
D)  budget 
A)  sales forecast 
B)  statement of cash flows 
C)  income statement 
D)  budget

Question 9

Depreciation is reported as an expense on the firm's income statement, it but does not involve any actual cash.

Accepted Answer

A) True 
 B)False

Question 10

_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs and other expenses.

Accepted Answer

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

Question 11

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as _____.

Accepted Answer

A)  the accounting process 
B)  the accounting system 
C)  generally accepted accounting principles (GAAP) 
D)  Financial Accounting Standards Board (FAS
B)  
A)  the accounting process 
B)  the accounting system 
C)  generally accepted accounting principles (GAAP) 
D)  Financial Accounting Standards Board (FAS
B)

Question 12

The natural progression of a business begins with _____.

Accepted Answer

A)  operating 
B)  investing 
C)  financing 
D)  selling 
A)  operating 
B)  investing 
C)  financing 
D)  selling

Question 13

The primary role of government accountants is to determine how efficiently their organizations have accomplished their objectives.

Accepted Answer

A) True 
 B)False

Question 14

Brown manages the sales force for his company. He is engaged in the _____ activity.

Accepted Answer

A)  operating 
B)  accounting 
C)  financing 
D)  investing 
A)  operating 
B)  accounting 
C)  financing 
D)  investing

Question 15

Reese works as a tax accountant at a mid-sized manufacturing company. Reese would be considered a _____.

Accepted Answer

A)  management consultant 
B)  public accountant 
C)  management accountant 
D)  government accountant 
A)  management consultant 
B)  public accountant 
C)  management accountant 
D)  government accountant

Question 16

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Accepted Answer

A) True 
 B)False

Question 17

Monica is involved in obtaining new funds to run and expand the business. She is engaged in an investing activity.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is correct?

Accepted Answer

A)  Budgets are limited to projecting cash inflows and outflows. 
B)  Budgets serve as a planning and control tool. 
C)  GAAP standards are used in budget development. 
D)  Budgets serve as a standard by which estimated performance is compared. 
A)  Budgets are limited to projecting cash inflows and outflows. 
B)  Budgets serve as a planning and control tool. 
C)  GAAP standards are used in budget development. 
D)  Budgets serve as a standard by which estimated performance is compared.

Question 19

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

Accepted Answer

A) True 
 B)False

Question 20

The not-for-profit sector is one of the fastest growing segments of accounting practice.

Accepted Answer

A) True 
 B)False

Two commonly used liquidity ratios are the inventory turnover ratio and the leverage ratio.

What is accrual accounting? How does depreciation affect net income and cash flow?

A firm's balance sheet shows its financial position over a period of time.

Investing activities focus on selling goods and services, but they also consider cost control as an important element of sound financial management.

Daily business decisions are generally unaffected by accounting information; long-term decisions, however, are affected by accounting information and the interpretation of financial reports.

An asset turnover ratio of 2.5 means that for every $1 in assets, the firm generates _____ in sales.

MATCHING Complete the following using the terms listed. -Proponents of _____ allow employees to view sensitive financial information so that they better understand how their work contributes to the company's success.

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues, operating expenses, and cash receipts and disbursements. Shane wants to create a(n) _____.

Depreciation is reported as an expense on the firm's income statement, it but does not involve any actual cash.

_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs and other expenses.

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as _____.

The natural progression of a business begins with _____.

The primary role of government accountants is to determine how efficiently their organizations have accomplished their objectives.

Brown manages the sales force for his company. He is engaged in the _____ activity.

Reese works as a tax accountant at a mid-sized manufacturing company. Reese would be considered a _____.

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Monica is involved in obtaining new funds to run and expand the business. She is engaged in an investing activity.

Which of the following statements is correct?

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

The not-for-profit sector is one of the fastest growing segments of accounting practice.

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

Two commonly used liquidity ratios are the inventory turnover ratio and the leverage ratio.

What is accrual accounting? How does depreciation affect net income and cash flow?

A firm's balance sheet shows its financial position over a period of time.

Investing activities focus on selling goods and services, but they also consider cost control as an important element of sound financial management.

Daily business decisions are generally unaffected by accounting information; long-term decisions, however, are affected by accounting information and the interpretation of financial reports.

An asset turnover ratio of 2.5 means that for every $1 in assets, the firm generates _____ in sales.

MATCHING Complete the following using the terms listed. -Proponents of _____ allow employees to view sensitive financial information so that they better understand how their work contributes to the company's success.

Shane wishes to create a financial blueprint for a future period that reflects such items as expected sales revenues, operating expenses, and cash receipts and disbursements. Shane wants to create a(n) _____.

Depreciation is reported as an expense on the firm's income statement, it but does not involve any actual cash.

_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs and other expenses.

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as _____.

The natural progression of a business begins with _____.

The primary role of government accountants is to determine how efficiently their organizations have accomplished their objectives.

Brown manages the sales force for his company. He is engaged in the _____ activity.

Reese works as a tax accountant at a mid-sized manufacturing company. Reese would be considered a _____.

Few not-for-profit organizations publish financial information since they are not required by law to do so.

Monica is involved in obtaining new funds to run and expand the business. She is engaged in an investing activity.

Which of the following statements is correct?

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

The not-for-profit sector is one of the fastest growing segments of accounting practice.

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