Question 1

Independent accounting firms that provide auditing services for public companies are called ________.

Accepted Answer

A)   forensic auditors
B)   external auditors
C)   cost accountants
D)   domestic auditors
E)   financial analysts B

Question 2

Sarbanes-Oxley Act outlaws most loans by corporations to their own directors and executives.

Accepted Answer

A) True 
 B)False  True

Question 3

Bookkeeping is the clerical function of recording the economic activities of a business.

Accepted Answer

A) True 
 B)False  True

Question 4

Public accountants are professionals who provide ________.

Accepted Answer

A)   accounting services to businesses and individuals for a fee
B)   accounting services to publically owned firms only
C)   financial services to not-for-profit organizations
D)   financial services without charging a fee for them
E)   financial services to people who trade in the stock market

Question 5

Cash basis is an accounting method in which revenue is recorded when a sale is made.

Accepted Answer

A) True 
 B)False

Question 6

Leverage ratios indicate ________.

Accepted Answer

A)   how well a company is making use of its assets
B)   a firm's ability to pay its short-term debts
C)   how well a company is making use of its investments
D)   a firm's ability to pay its long-term obligations
E)   a firm's ability to meet short-term obligations

Question 7

A firm's current liabilities amount to $30,000.It does not have any marketable securities and receivables amount to $20,000.Calculate the acid-test ratio of the firm if it has $40,000 cash in hand.

Accepted Answer

A)   2.0
B)   0.5
C)   1.0
D)   1.67
E)   1.5

Question 8

Briefly explain trend analysis.

Accepted Answer

The answer of Briefly explain trend analysis....

Question 9

________ is an accounting method in which revenue is recorded when payment is received and expense is recorded when money is paid.

Accepted Answer

A)   Accrual basis
B)   Profit basis
C)   Cash basis
D)   Depreciation
E)   Deferral basis

Question 10

Describe the major provisions of the Sarbanes-Oxley Act.

Accepted Answer

The answer of Describe the major provisions of the Sarbanes-Oxley...

Question 11

Which of the following statements is true of the double-entry bookkeeping system?

Accepted Answer

A)   Depreciation is not considered when recording transactions under this system.
B)   Only credit transactions are recorded under this system.
C)   The system records only those transactions that bring in revenue.
D)   The accounting equation is always kept in balance under the system.
E)   A business does not run on a cash basis under the double-entry bookkeeping system.

Question 12

Compare and contrast management accounting with financial accounting.

Accepted Answer

The answer of Compare and contrast management accounting with financial...

Question 13

________ refers to combining accounting and investigating skills to assist in legal and criminal matters.

Accepted Answer

A)   Financial analysis
B)   Tax accounting
C)   Bookkeeping
D)   Cost accounting
E)   Forensic accounting

Question 14

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

Accepted Answer

The answer of Select a manufacturing industry of your choice.Conduct...

Question 15

Income statement is a record of a company's total assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a current asset?

Accepted Answer

A)   accounts receivable
B)   goodwill
C)   land
D)   equipment
E)   intellectual property

Question 17

Jacob is the CEO of Drabo Associates,a firm that offers financial consulting to firms in the U.S.Drabo Associates gives Jacob an unguaranteed personal loan of $500,000.Which of the following legislations has outlawed such a transaction?

Accepted Answer

A)   Reconstruction Finance Corporation Act
B)   Public Utility Company Act
C)   Ethics in Government Act
D)   Sarbanes-Oxley Act
E)   Financial Services Modernization Act

Question 18

A firm has $30,000 cash and other current assets amount to $55,000.Total amount of current liabilities add up to $50,000.Calculate the total working capital of this firm.

Accepted Answer

A)   $20,000
B)   $5,000
C)   $30,000
D)   $85,000
E)   $35,000

Question 19

Marketing and distributing expenses are examples of general expenses.

Accepted Answer

A) True 
 B)False

Question 20

Leverage ratios indicate a company's ability to pay its long-term debts.

Accepted Answer

A) True 
 B)False

Exam 17: Financial Information and Accounting Concepts

Independent accounting firms that provide auditing services for public companies are called ________.

Sarbanes-Oxley Act outlaws most loans by corporations to their own directors and executives.

Bookkeeping is the clerical function of recording the economic activities of a business.

Public accountants are professionals who provide ________.

Cash basis is an accounting method in which revenue is recorded when a sale is made.

Leverage ratios indicate ________.

A firm's current liabilities amount to $30,000.It does not have any marketable securities and receivables amount to $20,000.Calculate the acid-test ratio of the firm if it has $40,000 cash in hand.

Briefly explain trend analysis.

________ is an accounting method in which revenue is recorded when payment is received and expense is recorded when money is paid.

Describe the major provisions of the Sarbanes-Oxley Act.

Which of the following statements is true of the double-entry bookkeeping system?

Compare and contrast management accounting with financial accounting.

________ refers to combining accounting and investigating skills to assist in legal and criminal matters.

Select a manufacturing industry of your choice.Conduct a ratio analysis of three major firms in the industry to determine and compare the activity ratios in the industry.Analyze the results that you have calculated.

Income statement is a record of a company's total assets and liabilities.

Which of the following is an example of a current asset?

Jacob is the CEO of Drabo Associates,a firm that offers financial consulting to firms in the U.S.Drabo Associates gives Jacob an unguaranteed personal loan of $500,000.Which of the following legislations has outlawed such a transaction?

A firm has $30,000 cash and other current assets amount to $55,000.Total amount of current liabilities add up to $50,000.Calculate the total working capital of this firm.

Marketing and distributing expenses are examples of general expenses.

Leverage ratios indicate a company's ability to pay its long-term debts.