Question 1

________ is an accounting method in which revenue is recorded when a sale is made,and expense is recorded when it is incurred.

Accepted Answer

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

Question 2

A(n)________ is the highest-ranking accountant in a company,responsible for overseeing all accounting functions.

Accepted Answer

A)  inventory manager 
B)  controller 
C)  treasurer 
D)  credit manager 
E)  cost accountant

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Describe cost of goods sold and operating expenses.

Accepted Answer

The answer of Describe cost of goods sold and operating...

Question 6

Obtain the financial statements of a public company of your choice.Conduct a ratio analysis to determine the leverage ratios of the company.Comment on the company's growth potential and risk based on your analysis.

Accepted Answer

The answer of Obtain the financial statements of a public...

Question 7

Working capital refers to the amount of cash an organization has in hand.

Accepted Answer

A) True 
 B)False

Question 8

Explain the significance of the income statement of a business.

Accepted Answer

The answer of Explain the significance of the income statement...

Question 9

GAAP aims to ________.

Accepted Answer

A)  prohibit firms from documenting their internal financial controls and processes 
B)  give companies the freedom to determine the salaries of its employees 
C)  prevent firms from using internal auditors to audit operations 
D)  enable outsiders to make confident analyses and comparisons 
E)  provide the users with business intelligence to make informed decisions

Question 10

Which of the following is an example of a company's asset?

Accepted Answer

A)  inventory in the warehouse 
B)  mortgage loans 
C)  bonds issued by the company 
D)  short-term loans 
E)  debt security raised by the company

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

________ is an accounting procedure for systematically spreading the cost of a tangible asset over its estimated useful life.

Accepted Answer

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

Question 13

The ________ is a financial record that represents a company's revenues,expenses,and profits over a given period of time.

Accepted Answer

A)  statement of current assets 
B)  income statement 
C)  balance sheet 
D)  cash flow statement 
E)  statement of financial position

Question 14

Charles Associates is an accounting firm that provides accounting services to many companies across the United States.The company follows an accounting system where it records revenue only when the money is actually received.Identify the accounting system that this company is using.

Accepted Answer

A)  depreciation 
B)  deferral basis 
C)  accrual basis 
D)  profit basis 
E)  cash basis

Question 15

The ________ requires that expenses incurred in producing revenues be deducted from the revenue they generated during the same accounting period.

Accepted Answer

A)  principle of prudence 
B)  deferral principle 
C)  materiality principle 
D)  matching principle 
E)  principle of continuity

Question 16

Briefly explain trend analysis.

Accepted Answer

The answer of Briefly explain trend analysis....

Question 17

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 18

A company has the following assets: (1)Fixed assets worth $30,000 and (2)investments worth $6,000.The company's total liabilities amount to $25,000.What is the owner's equity of the company?

Accepted Answer

A)  $24,000 
B)  $36,000 
C)  $5000 
D)  $30,000 
E)  $11,000

Question 19

Describe double-entry bookkeeping and the matching principle.

Accepted Answer

The answer of Describe double-entry bookkeeping and the matching principle....

Question 20

Explain how private accountants function.

Accepted Answer

The answer of Explain how private accountants function....

Exam 17: Financial Information and Accounting Concepts

________ is an accounting method in which revenue is recorded when a sale is made,and expense is recorded when it is incurred.

A(n) ________ is the highest-ranking accountant in a company,responsible for overseeing all accounting functions.

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

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

Describe cost of goods sold and operating expenses.

Obtain the financial statements of a public company of your choice.Conduct a ratio analysis to determine the leverage ratios of the company.Comment on the company's growth potential and risk based on your analysis.

Working capital refers to the amount of cash an organization has in hand.

Explain the significance of the income statement of a business.

GAAP aims to ________.

Which of the following is an example of a company's asset?

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

________ is an accounting procedure for systematically spreading the cost of a tangible asset over its estimated useful life.

The ________ is a financial record that represents a company's revenues,expenses,and profits over a given period of time.

Charles Associates is an accounting firm that provides accounting services to many companies across the United States.The company follows an accounting system where it records revenue only when the money is actually received.Identify the accounting system that this company is using.

The ________ requires that expenses incurred in producing revenues be deducted from the revenue they generated during the same accounting period.

Briefly explain trend analysis.

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

A company has the following assets: (1) Fixed assets worth $30,000 and (2) investments worth $6,000.The company's total liabilities amount to $25,000.What is the owner's equity of the company?

Describe double-entry bookkeeping and the matching principle.

Explain how private accountants function.