Question 1

Daily business decisions are generally unaffected by accounting information;long-term decisions,however,are affected by accounting information and the interpretation of financial reports.

Accepted Answer

A) True 
 B)False

Question 2

Complete the following using the terms listed.
-A(n) _____ is employed by a business other than a public accounting firm.

Accepted Answer

A)  certified public accountant
B)  International Financial Reporting Standards
C)  asset
D)  liability
E)  Owners' equityF) accounting equationG) balance sheetH) income statementI) Sarbanes-Oxley Act (SOX) J) accrual accountingK) open book managementL) budgetM) generally accepted accounting principles (GAAP) N) Financial Accounting Standards Board (FAS
B)  O) profitability ratiosP) International Accounting Standards Committee (IAS
C)  Q) Leverage ratiosR) management accountantS) F) and I)
T) D) and G)

Question 3

An accountant employed by a business other than an accounting firm is called a management accountant.

Accepted Answer

A) True 
 B)False

Question 4

Not-for-profit organizations use only public accountants.

Accepted Answer

A) True 
 B)False

Question 5

Assets can include intangible possessions such as patents and trademarks.

Accepted Answer

A) True 
 B)False

Question 6

Diana asked her accountant to prepare a summary of the company's "bottom line." What specific information is Diana interested in?

Accepted Answer

A)  Comparison of assets and liabilities
B)  The company's financial position for that week
C)  Net income after taxes
D)  Statement of owners' equityE) A) and C)
F) None of the above

Question 7

Cash budgets are typically prepared on a weekly basis.

Accepted Answer

A) True 
 B)False

Question 8

The assets seen in a balance sheet are in descending order of _____.

Accepted Answer

A)  liabilities
B)  leverage ratio
C)  liquidity
D)  acid-test ratioE) A) and B)
F) A) and C)

Question 9

Complete the following using the terms listed.
-Proponents of _____ allow employees to view sensitive financial information so that they better understand how their work contributes to the company's success.

Accepted Answer

A)  certified public accountant
B)  International Financial Reporting Standards
C)  asset
D)  liability
E)  Owners' equityF) accounting equationG) balance sheetH) income statementI) Sarbanes-Oxley Act (SOX) J) accrual accountingK) open book managementL) budgetM) generally accepted accounting principles (GAAP) N) Financial Accounting Standards Board (FAS
B)  O) profitability ratiosP) International Accounting Standards Committee (IAS
C)  Q) Leverage ratiosR) management accountantS) J) and R)
T) E) and O)

Question 10

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are known as _____.

Accepted Answer

A)  statisticians
B)  accountants
C)  IRS agents
D)  IRS agents' managersE) B) and C)
F) All of the above

Question 11

Public accountants are typically employees of the firm for which they are providing services.

Accepted Answer

A) True 
 B)False

Question 12

Complete the following using the terms listed.
-A(n) _____ is anything of value owned or leased by a business.

Accepted Answer

A)  certified public accountant
B)  International Financial Reporting Standards
C)  asset
D)  liability
E)  Owners' equityF) accounting equationG) balance sheetH) income statementI) Sarbanes-Oxley Act (SOX) J) accrual accountingK) open book managementL) budgetM) generally accepted accounting principles (GAAP) N) Financial Accounting Standards Board (FAS
B)  O) profitability ratiosP) International Accounting Standards Committee (IAS
C)  Q) Leverage ratiosR) management accountantS) H) and Q)
T) G) and L)

Question 13

Scott Corp. ,an apparel company,has total assets worth $8,500.The owners' initial investment in Scott Corp.stood at $4,000,and profits that were not paid out to owners over time was at $2,000.Calculate the total liabilities.

Accepted Answer

A)  $10,500
B)  $6,500
C)  $4,500
D)  $2,500E) B) and D)
F) A) and B)

Question 14

The CEO of an online retail store plans to share all financial information with the company's employees.The CEO believes that in doing so,employees will understand how they contribute to the success of the company.The CEO,in this scenario,is implementing _____.

Accepted Answer

A)  knowledge management
B)  double-entry bookkeeping
C)  open book management
D)  on-demand computingE) All of the above
F) A) and B)

Question 15

What is accrual accounting? How does depreciation affect net income and cash flow?

Accepted Answer

Accrual accounting recognizes revenues a...

Question 16

_____ activities focus on selling goods and services.

Accepted Answer

A)  Marketing
B)  Operating
C)  Financing
D)  InvestingE) B) and D)
F) B) and C)

Question 17

Double-entry bookkeeping refers to the process by which accounting transactions are recorded.

Accepted Answer

A) True 
 B)False

Question 18

An international firm's consolidated financial statements must reflect any gains or losses due to changes in exchange rates during specific periods of time.

Accepted Answer

A) True 
 B)False

Question 19

Zane Corporation sells $1,000 worth of goods on July 25 on credit.The customer sends the company a check on August 15.The customer receives the goods on September 1.Assuming the company uses accrual accounting,the sale will be recorded in _____.

Accepted Answer

A)  August
B)  July
C)  September
D)  OctoberE) None of the above
F) A) and B)

Question 20

All organizations perform three basic business activities.List and describe these activities.

Accepted Answer

All businesses perform,in natural progre...

Exam 15: Understanding Accounting and Financial Statements

Not-for-profit organizations use only public accountants.

Correct AnswerverifiedShow Answer

Zane Corporation sells $1,000 worth of goods on July 25 on credit.The customer sends the company a check on August 15.The customer receives the goods on September 1.Assuming the company uses accrual accounting,the sale will be recorded in _____.

Correct AnswerverifiedShow Answer

Public accountants are typically employees of the firm for which they are providing services.

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An accountant employed by a business other than an accounting firm is called a management accountant.

Correct AnswerverifiedShow Answer

What is accrual accounting? How does depreciation affect net income and cash flow?

Correct AnswerverifiedAccrual accounting recognizes revenues a...View AnswerShow Answer

Diana asked her accountant to prepare a summary of the company's "bottom line." What specific information is Diana interested in?

Correct AnswerverifiedShow Answer

Cash budgets are typically prepared on a weekly basis.

Correct AnswerverifiedShow Answer

Complete the following using the terms listed. -A(n) _____ is anything of value owned or leased by a business.

Correct AnswerverifiedShow Answer

An international firm's consolidated financial statements must reflect any gains or losses due to changes in exchange rates during specific periods of time.

Correct AnswerverifiedShow Answer

Daily business decisions are generally unaffected by accounting information;long-term decisions,however,are affected by accounting information and the interpretation of financial reports.

Correct AnswerverifiedShow Answer

The assets seen in a balance sheet are in descending order of _____.

Correct AnswerverifiedShow Answer

The CEO of an online retail store plans to share all financial information with the company's employees.The CEO believes that in doing so,employees will understand how they contribute to the success of the company.The CEO,in this scenario,is implementing _____.

Correct AnswerverifiedShow Answer

All organizations perform three basic business activities.List and describe these activities.

Correct AnswerverifiedAll businesses perform,in natural progre...View AnswerShow Answer

Complete the following using the terms listed. -Proponents of _____ allow employees to view sensitive financial information so that they better understand how their work contributes to the company's success.

Correct AnswerverifiedShow Answer

Double-entry bookkeeping refers to the process by which accounting transactions are recorded.

Correct AnswerverifiedShow Answer

Assets can include intangible possessions such as patents and trademarks.

Correct AnswerverifiedShow Answer

Complete the following using the terms listed. -A(n) _____ is employed by a business other than a public accounting firm.

Correct AnswerverifiedShow Answer

_____ activities focus on selling goods and services.

Correct AnswerverifiedShow Answer

Scott Corp. ,an apparel company,has total assets worth $8,500.The owners' initial investment in Scott Corp.stood at $4,000,and profits that were not paid out to owners over time was at $2,000.Calculate the total liabilities.

Correct AnswerverifiedShow Answer

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are known as _____.

Correct AnswerverifiedShow Answer

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Accrual accounting recognizes revenues a...
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All businesses perform,in natural progre...
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