Question 1

Which of the following is true of theories based on the bounded rationality models?

Accepted Answer

A)   It assumes that people are inefficient processors of information.
B)   It assumes that people use complete information and incomplete analyses to make decisions.
C)   It assumes that people have unlimited abilities to obtain and process information.
D)   It assumes that the human mind is fundamentally irrational.

Question 2

Which of the following concepts assume that information flows from the income statement through the statement of retained earnings,the statement of owners' equity to the balance sheet?

Accepted Answer

A)   Articulate concept
B)   Going concern concept
C)   Opportunity cost concept
D)   Leveraging concept

Question 3

Identify and briefly describe the five basic accounting concepts.

Accepted Answer

The most basic concepts of accounting ar...

Question 4

What are some of the tasks an accounting system should be able to perform in order to ensure that a business's accounting information is accurate,reliable,and useful?

Accepted Answer

To ensure that your accounting informati...

Question 5

Which of the following is true of managerial accounting?

Accepted Answer

A)   It is used to produce tax returns and schedules.
B)   It is a rule-based system intended primarily for absentee owners.
C)   It is forward-looking in nature.
D)   It is primarily for bankers,investors,and regulators.

Question 6

Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes.Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?

Accepted Answer

A)   The business entity idea
B)   The going concern expectation
C)   The accounting equation
D)   The revenue and expense premise

Question 7

Which of the following is true of accounting equation?

Accepted Answer

A)   It is used to place records into understandable categories that are useful for managing a business.
B)   It assumes that a successful business will stay in business and this enables long-range planning and strategy.
C)   It underlies the legal forms of establishing businesses,such as corporations,limited partnerships,and limited liability companies.
D)   It ensures that accounting information is useful to the firm's stakeholders.

Question 8

Which of the following is true of typical accounting functions used in businesses?

Accepted Answer

A)   Inventory accounting facilitates maintenance of appropriate levels of inventory and aids in calculation of appropriate stocking and reorder levels.
B)   Fixed assets record the improvements to leased property or equipment made by the business.
C)   Payroll records automatically calculate and accumulate depreciation.
D)   Accounts receivable records track what one owes and helps to make timely payments.

Question 9

Which of the following is a reason for a business to do accounting?

Accepted Answer

A)   To make it difficult for information to be evaluated by others
B)   To help managers bypass legal or contractual requirements
C)   To produce information that is useful for managing a business
D)   To make inaccurate information pass off as relevant and useful

Question 10

Aaron,a businessman,has a method of keeping track of accounts receivable by sorting them into groups of those that are 30,60,90,and over 90 days past due.Aaron's key in controlling receivables is to have them _____,by sorting them into groups.

Accepted Answer

A)   collected
B)   aged
C)   merged
D)   written-off B

Question 11

Activities through which cash is obtained from and paid to lenders,owners,and investors are called _____ activities.

Accepted Answer

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

Question 12

Identify the managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize gains.

Accepted Answer

A)   Cost-volume-profit analysis
B)   Marginal revenue costs analysis
C)   Break even analysis
D)   Cash flow analysis

Question 13

_____ refers to the ability of a business to survive adverse financial events.

Accepted Answer

A)   Liquidity
B)   Financial flexibility
C)   Financial strength
D)   Profitability C

Question 14

Is accounting important to small businesses? Explain.

Accepted Answer

What makes a business businesslike is its focus on making money,and in the end,the only way an owner knows or can prove to others that money is being made is through keeping careful accounting records.Accountants themselves think of five reasons why accounting is important to a small business:
1.It proves what your business did financially.
2.It shows how much your business is worth.
3.Banks,creditors,development agencies,and investors require it.
4.It provides easy-to-understand plans for business operations.
5.You can't know how your business is doing without it.

Question 15

Which of the following accounting functions has been accurately described?

Accepted Answer

A)   Investments records help produce accurate billing of customers,and thus help to maintain good customer relations.
B)   Payroll records track if your business keeps surplus cash invested in securities.
C)   Accounts payable records help to make timely payments in order to capture prompt pay discounts and to maintain a good credit rating for the business.
D)   Credit card sales function enables that payroll and employment taxes are kept current.

Question 16

Financial statements containing estimated or hypothetical information are called:

Accepted Answer

A)   pro forma statements.
B)   assumed income statements.
C)   tentative balance sheets.
D)   annual report statements.

Question 17

Legal obligations to give up things of value in the future are known as _____.

Accepted Answer

A)   assets
B)   borrowings
C)   liabilities
D)   owners' equity

Question 18

Define the terms liquidity,financial flexibility,and financial strength.Explain the difference between financial flexibility and financial strength.

Accepted Answer

Liquidity: A measure of how quickly a co...

Question 19

Which of the following is a feature that a chosen accounting system should have?

Accepted Answer

A)   It should facilitate the development of a cash budget.
B)   It should limit the production of custom reports that meet management needs.
C)   It should show the financial position of the business only after elaborate processing.
D)   It should have a limited context-independent help function.

Question 20

Differentiate between income statement and balance sheet.

Accepted Answer

The income statement is the primary sour...

Exam 13: Small Business Accounting: Projecting and Evaluating Performance

Which of the following is true of theories based on the bounded rationality models?

Correct Answer
verified

Which of the following concepts assume that information flows from the income statement through the statement of retained earnings,the statement of owners' equity to the balance sheet?

Correct Answer
verified

Identify and briefly describe the five basic accounting concepts.

Correct Answer
verified
The most basic concepts of accounting ar...
View Answer

What are some of the tasks an accounting system should be able to perform in order to ensure that a business's accounting information is accurate,reliable,and useful?

Correct Answer
verified
To ensure that your accounting informati...
View Answer

Which of the following is true of managerial accounting?

Correct Answer
verified

Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes.Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?

Correct Answer
verified

Which of the following is true of accounting equation?

Correct Answer
verified

Which of the following is true of typical accounting functions used in businesses?

Correct Answer
verified

Which of the following is a reason for a business to do accounting?

Correct Answer
verified

Aaron,a businessman,has a method of keeping track of accounts receivable by sorting them into groups of those that are 30,60,90,and over 90 days past due.Aaron's key in controlling receivables is to have them _____,by sorting them into groups.

Correct Answer
verified
B

Activities through which cash is obtained from and paid to lenders,owners,and investors are called _____ activities.

Correct Answer
verified

Identify the managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize gains.

Correct Answer
verified

_____ refers to the ability of a business to survive adverse financial events.

Correct Answer
verified
C

Is accounting important to small businesses? Explain.

Which of the following accounting functions has been accurately described?

Correct Answer
verified

Financial statements containing estimated or hypothetical information are called:

Correct Answer
verified

Legal obligations to give up things of value in the future are known as _____.

Correct Answer
verified

Define the terms liquidity,financial flexibility,and financial strength.Explain the difference between financial flexibility and financial strength.

Correct Answer
verified
Liquidity: A measure of how quickly a co...
View Answer

Which of the following is a feature that a chosen accounting system should have?

Correct Answer
verified

Differentiate between income statement and balance sheet.

Correct Answer
verified
The income statement is the primary sour...
View Answer

Exam 13: Small Business Accounting: Projecting and Evaluating Performance

Which of the following is true of theories based on the bounded rationality models?

Correct AnswerverifiedShow Answer

Which of the following concepts assume that information flows from the income statement through the statement of retained earnings,the statement of owners' equity to the balance sheet?

Correct AnswerverifiedShow Answer

Identify and briefly describe the five basic accounting concepts.

Correct AnswerverifiedThe most basic concepts of accounting ar...View AnswerShow Answer

What are some of the tasks an accounting system should be able to perform in order to ensure that a business's accounting information is accurate,reliable,and useful?

Correct AnswerverifiedTo ensure that your accounting informati...View AnswerShow Answer

Which of the following is true of managerial accounting?

Correct AnswerverifiedShow Answer

Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes.Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?

Correct AnswerverifiedShow Answer

Which of the following is true of accounting equation?

Correct AnswerverifiedShow Answer

Which of the following is true of typical accounting functions used in businesses?

Correct AnswerverifiedShow Answer

Which of the following is a reason for a business to do accounting?

Correct AnswerverifiedShow Answer

Aaron,a businessman,has a method of keeping track of accounts receivable by sorting them into groups of those that are 30,60,90,and over 90 days past due.Aaron's key in controlling receivables is to have them _____,by sorting them into groups.

Correct AnswerverifiedB

Activities through which cash is obtained from and paid to lenders,owners,and investors are called _____ activities.

Correct AnswerverifiedShow Answer

Identify the managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize gains.

Correct AnswerverifiedShow Answer

_____ refers to the ability of a business to survive adverse financial events.

Correct AnswerverifiedC

Is accounting important to small businesses? Explain.

Which of the following accounting functions has been accurately described?

Correct AnswerverifiedShow Answer

Financial statements containing estimated or hypothetical information are called:

Correct AnswerverifiedShow Answer

Legal obligations to give up things of value in the future are known as _____.

Correct AnswerverifiedShow Answer

Define the terms liquidity,financial flexibility,and financial strength.Explain the difference between financial flexibility and financial strength.

Correct AnswerverifiedLiquidity: A measure of how quickly a co...View AnswerShow Answer

Which of the following is a feature that a chosen accounting system should have?

Correct AnswerverifiedShow Answer

Differentiate between income statement and balance sheet.

Correct AnswerverifiedThe income statement is the primary sour...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The most basic concepts of accounting ar...
View Answer

Correct Answer
verified
To ensure that your accounting informati...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Liquidity: A measure of how quickly a co...
View Answer

Correct Answer
verified

Correct Answer
verified
The income statement is the primary sour...
View Answer