Question 1

Which of the following classification of ratios reflects the speed with which resources are converted to cash or sales?

Accepted Answer

A)   leverage
B)   equity
C)   activity
D)   profitability

Question 2

Which of the following calculations is a formal expression of the accounting equation?

Accepted Answer

A)   assets - owners' equity = liabilities
B)   assets = liabilities + owners' equity
C)   assets + liabilities = retained earnings
D)   assets + liabilities = owners' equity

Question 3

Which of the following is the most significant current trend in accounting in Canada?

Accepted Answer

A)   the importance of knowledge assets
B)   the expectation to report green and social accounting
C)   the importance of intellectual capital
D)   the expanded role of accountants

Question 4

Humphrey Mattress Company sold $130,000 worth of merchandise in May. The manufacturer gave no discounts and had no returns. Which of the following statements best describes the information seen on the company's income statement?

Accepted Answer

A)   liabilities equal assets
B)   gross sales equal net sales
C)   cost of goods sold exceeds gross sales
D)   gross sales exceeds net sales

Question 5

Accounting is the process of collecting, recording, classifying, summarizing, reporting, and analyzing the financial condition of an organization.

Accepted Answer

A) True 
 B)False

Question 6

Gross sales for Alfredo Milling Company was $100,000 for the month of May. Sales discounts amounted to $3,000. There were no returns. The difference, $97,000, represents which of the following for Alfredo Milling Company?

Accepted Answer

A)   cost of goods sold
B)   gross revenues
C)   gross profit
D)   net sales

Question 7

In accounting, every transaction must be recorded as two entries. This system is known as which of the following?

Accepted Answer

A)   dual-notation bookkeeping
B)   double-entry bookkeeping
C)   double-decker bookkeeping
D)   accounting-cycle bookkeeping

Question 8

What is the first step in the accounting cycle?

Accepted Answer

Analyze bu...

Question 9

Earnings per share is the dollar amount earned by each share, not the actual amount given to shareholders in the form of dividends.

Accepted Answer

A) True 
 B)False

Question 10

Calculating and interpreting financial ratios taken from the company's financial statements in order to assess its condition and performance is called ratio analysis.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of a cost of goods sold for a manufacturer of electric fans?

Accepted Answer

A)   overtime hours needed to fill a large summer order
B)   office phone bill
C)   sales commissions
D)   factory utilities

Question 12

What are things of value owned by a company?

Accepted Answer

A)   intangibles
B)   assets
C)   owners' equity
D)   tangibles

Question 13

What is the first step in the accounting cycle?

Accepted Answer

A)   Analyze the financial statements.
B)   Prepare the financial statements.
C)   Analyze the business transaction documents.
D)   Prepare the trial balance.

Question 14

What do liquidity ratios measure?

Accepted Answer

A)   long-term financial stability
B)   earnings per share
C)   annual sales and profits
D)   short-term financial stability

Question 15

What do debt ratios measure?

Accepted Answer

the degree and effec...

Question 16

An accounting system should generate both internal and external reports.

Accepted Answer

A) True 
 B)False

Question 17

What is the ratio of total current assets to current liabilities?

Accepted Answer

A)   activity ratio
B)   profitability ratio
C)   current ratio
D)   net margin ratio

Question 18

Which of the following is used by managers to interpret the numbers in financial statements?

Accepted Answer

A)   depreciation ratios
B)   asset analysis
C)   operating ratios
D)   ratio analysis

Question 19

Which of the following is NOT a financial statement but a system to prove the balance of the debits and credits and is a list of each account and its net balance?

Accepted Answer

A)   practice balance
B)   trial balance
C)   trial ledger
D)   T-account

Question 20

What are the two main types of operating expenses?

Accepted Answer

A)   production and general and administrative
B)   production and office
C)   selling and general and administrative
D)   office and selling

Exam 16: Accounting for Financial Success

Which of the following is an example of a cost of goods sold for a manufacturer of electric fans?

Correct AnswerverifiedShow Answer

In accounting, every transaction must be recorded as two entries. This system is known as which of the following?

Correct AnswerverifiedShow Answer

What is the ratio of total current assets to current liabilities?

Correct AnswerverifiedShow Answer

Which of the following classification of ratios reflects the speed with which resources are converted to cash or sales?

Correct AnswerverifiedShow Answer

Gross sales for Alfredo Milling Company was $100,000 for the month of May. Sales discounts amounted to $3,000. There were no returns. The difference, $97,000, represents which of the following for Alfredo Milling Company?

Correct AnswerverifiedShow Answer

Which of the following is NOT a financial statement but a system to prove the balance of the debits and credits and is a list of each account and its net balance?

Correct AnswerverifiedShow Answer

Accounting is the process of collecting, recording, classifying, summarizing, reporting, and analyzing the financial condition of an organization.

Correct AnswerverifiedShow Answer

Which of the following is used by managers to interpret the numbers in financial statements?

Correct AnswerverifiedShow Answer

Earnings per share is the dollar amount earned by each share, not the actual amount given to shareholders in the form of dividends.

Correct AnswerverifiedShow Answer

Calculating and interpreting financial ratios taken from the company's financial statements in order to assess its condition and performance is called ratio analysis.

Correct AnswerverifiedShow Answer

Which of the following is the most significant current trend in accounting in Canada?

Correct AnswerverifiedShow Answer

What are the two main types of operating expenses?

Correct AnswerverifiedShow Answer

What do debt ratios measure?

Correct Answerverifiedthe degree and effec...View AnswerShow Answer

An accounting system should generate both internal and external reports.

Correct AnswerverifiedShow Answer

Which of the following calculations is a formal expression of the accounting equation?

Correct AnswerverifiedShow Answer

Humphrey Mattress Company sold $130,000 worth of merchandise in May. The manufacturer gave no discounts and had no returns. Which of the following statements best describes the information seen on the company's income statement?

Correct AnswerverifiedShow Answer

What is the first step in the accounting cycle?

Correct AnswerverifiedAnalyze bu...View AnswerShow Answer

What are things of value owned by a company?

Correct AnswerverifiedShow Answer

What is the first step in the accounting cycle?

Correct AnswerverifiedShow Answer

What do liquidity ratios measure?

Correct AnswerverifiedShow Answer

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the degree and effec...
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Analyze bu...
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