Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

Camille is an accountant who works for a firm providing auditing services to other businesses.Camille is a public accountant.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Explain the accounting equation.

Accepted Answer

The accounting equation states that asse

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a noncash expense?

Accepted Answer

A) Depreciation 
B) Operating costs 
C) Income taxes 
D) Cost of goods sold 
A) Depreciation 
B) Operating costs 
C) Income taxes 
D) Cost of goods sold

Question 8

A(n)_____ is a financial statement that is directly based on the accounting equation.

Accepted Answer

A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of changes in retained earnings 
A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of changes in retained earnings

Question 9

What happens when the value of dollar drops?

Accepted Answer

A) The earnings of a U.S.company with national operations increase. 
B) The earnings of a U.S.company with national operations decrease. 
C) The earnings of a U.S.company with international operations increase. 
D) The earnings of a U.S.company with international operations decrease. 
A) The earnings of a U.S.company with national operations increase. 
B) The earnings of a U.S.company with national operations decrease. 
C) The earnings of a U.S.company with international operations increase. 
D) The earnings of a U.S.company with international operations decrease.

Question 10

If a company has an acid test ratio of 1.00,$5 million in inventory,and $10 million in current liabilities,what are its total current assets?

Accepted Answer

A) $5 million 
B) $10 million 
C) $15 million 
D) $20 million 
A) $5 million 
B) $10 million 
C) $15 million 
D) $20 million

Question 11

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 12

If a U.S.company has substantial operations in Europe and the value of the euro falls relative to the U.S.dollar,the company's profits,stated in U.S.dollars,will also fall.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Which of the following current assets is NOT included when calculating the acid-test ratio?

Accepted Answer

A) Inventory 
B) Marketable securities 
C) Cash 
D) Accounts receivable 
A) Inventory 
B) Marketable securities 
C) Cash 
D) Accounts receivable

Question 15

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 16

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 17

A company's overall operating budget is a composite of many individual budgets for separate units of the firm.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following was established in 1973 to promote worldwide consistency in financial reporting practices?

Accepted Answer

A) FASB 
B) IASC 
C) The World Bank 
D) GAAP 
A) FASB 
B) IASC 
C) The World Bank 
D) GAAP

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Discuss the responsibilities of accountants and auditors.

Accepted Answer

Accountants and auditors typically organ

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

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

Camille is an accountant who works for a firm providing auditing services to other businesses.Camille is a public accountant.

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 accounting equation.

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

Which of the following is a noncash expense?

A(n)_____ is a financial statement that is directly based on the accounting equation.

What happens when the value of dollar drops?

If a company has an acid test ratio of 1.00,$5 million in inventory,and $10 million in current liabilities,what are its total current assets?

Which of the following statements is correct?

If a U.S.company has substantial operations in Europe and the value of the euro falls relative to the U.S.dollar,the company's profits,stated in U.S.dollars,will also fall.

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.

Which of the following current assets is NOT included when calculating the acid-test ratio?

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

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

A company's overall operating budget is a composite of many individual budgets for separate units of the firm.

Which of the following was established in 1973 to promote worldwide consistency in financial reporting practices?

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

Discuss the responsibilities of accountants and auditors.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays 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

Trends in E-Commerce

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Exam 15: Understanding Accounting and Financial Statements

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

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

Camille is an accountant who works for a firm providing auditing services to other businesses.Camille is a public accountant.

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 accounting equation.

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

Which of the following is a noncash expense?

A(n)_____ is a financial statement that is directly based on the accounting equation.

What happens when the value of dollar drops?

If a company has an acid test ratio of 1.00,$5 million in inventory,and $10 million in current liabilities,what are its total current assets?

Which of the following statements is correct?

If a U.S.company has substantial operations in Europe and the value of the euro falls relative to the U.S.dollar,the company's profits,stated in U.S.dollars,will also fall.

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.

Which of the following current assets is NOT included when calculating the acid-test ratio?

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

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

A company's overall operating budget is a composite of many individual budgets for separate units of the firm.

Which of the following was established in 1973 to promote worldwide consistency in financial reporting practices?

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

Discuss the responsibilities of accountants and auditors.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Todays 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

Trends in E-Commerce

Filters