Question 1

Mitchell works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Mitchell's job?

Accepted Answer

A) Market researcher 
B) Systems analyst 
C) Investor 
D) Accountant

Question 2

A debt ratio of 20% means that the firm is relying more on borrowed money than owners' equity.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are profitability ratios EXCEPT _____.

Accepted Answer

A) inventory turnover 
B) return on equity 
C) net profit margin 
D) gross profit margin

Question 4

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

Question 5

Complete the following using the terms listed.
-An organization's overall financial performance is measured by its _____,which evaluates the ability to generate revenues in excess of operating costs and other expenses.

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)Sarbanes-Oxley Act (SOX)
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 6

Explain the differences between public accountants and management accountants.

Accepted Answer

The answer of Explain the differences between public accountants and...

Question 7

Elena works for a mid-sized manufacturing company.Her responsibility is to examine the company's financial practices to ensure that records include accurate data and that the company's operations are in compliance with federal,state,and local laws and regulations.Elena is a(n)_____.

Accepted Answer

A) government accountant 
B) cost accountant 
C) tax accountant 
D) internal auditor

Question 8

Which of the following is true of Mint.com?

Accepted Answer

A) It is an online tool for managing personal finances. 
B) It tracks a company's cash inflows and outflows. 
C) It is a complex and sophisticated budgeting system. 
D) It promotes worldwide consistency in financial reporting practices.

Question 9

What is the purpose of the balance sheet? Explain how it is organized.

Accepted Answer

The answer of What is the purpose of the balance...

Question 10

_____ activities provide the necessary funds to start a business and to expand it after it begins operations.

Accepted Answer

A) Selling 
B) Financing 
C) Operating 
D) Investing

Question 11

The procedure used by accountants to convert data about individual transactions to financial statements is called _____.

Accepted Answer

A) the cash flow method 
B) the statement of owners' equity 
C) the accounting cycle 
D) the balance sheet

Question 12

Complete the following using the terms listed.
-A(n)_____ requires a minimum of a bachelor's degree;150 hours of education and experience;and the completion of a number of rigorous tests in accounting theory and practice,auditing,law,and taxes.

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)Sarbanes-Oxley Act (SOX)
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 13

Expenses that have been incurred (such as wages)but have yet to be paid are reported on the balance sheet as _____.

Accepted Answer

A) accruals 
B) accounts receivable 
C) accounts payable 
D) notes payable

Question 14

Using the following balance sheet information,find the firm's acid-test ratio.

Accepted Answer

A) 0.60 
B) 1.00 
C) 1.40 
D) 2.00

Question 15

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

Accepted Answer

The answer of Explain how exchange rates influence international accounting...

Question 16

Most companies refuse to share any financial information with employees.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

Discuss how forensic accounting helps fight crime in today's business world and illustrate using examples.

Accepted Answer

The answer of Discuss how forensic accounting helps fight crime...

Question 19

Describe the purpose of budgets in a business.

Accepted Answer

The answer of Describe the purpose of budgets in a...

Question 20

A firm's acid-test ratio can never be higher than its current ratio.

Accepted Answer

A) True 
 B)False

Exam 15: Understanding Accounting and Financial Statements

Mitchell works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Mitchell's job?

A debt ratio of 20% means that the firm is relying more on borrowed money than owners' equity.

All of the following are profitability ratios EXCEPT _____.

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

Complete the following using the terms listed. -An organization's overall financial performance is measured by its _____,which evaluates the ability to generate revenues in excess of operating costs and other expenses.

Explain the differences between public accountants and management accountants.

Elena works for a mid-sized manufacturing company.Her responsibility is to examine the company's financial practices to ensure that records include accurate data and that the company's operations are in compliance with federal,state,and local laws and regulations.Elena is a(n) _____.

Which of the following is true of Mint.com?

What is the purpose of the balance sheet? Explain how it is organized.

_____ activities provide the necessary funds to start a business and to expand it after it begins operations.

The procedure used by accountants to convert data about individual transactions to financial statements is called _____.

Complete the following using the terms listed. -A(n) _____ requires a minimum of a bachelor's degree;150 hours of education and experience;and the completion of a number of rigorous tests in accounting theory and practice,auditing,law,and taxes.

Expenses that have been incurred (such as wages) but have yet to be paid are reported on the balance sheet as _____.

Using the following balance sheet information,find the firm's acid-test ratio.

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

Most companies refuse to share any financial information with employees.

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

Discuss how forensic accounting helps fight crime in today's business world and illustrate using examples.

Describe the purpose of budgets in a business.

A firm's acid-test ratio can never be higher than its current ratio.