Question 1

The statement of cash flows for a business offers information on all of the following except

Accepted Answer

A)  available cash to pay a company's bills.
B)  expenses during a particular accounting period.
C)  available cash to pay dividends to stockholders.
D)  decisions about the evaluation of a company's future investments.
E)  a company's financing needs.F) B) and E)
G) None of the above

Question 2

The process of spreading the cost of a fixed asset over the asset's useful life is called

Accepted Answer

A)  expensing.
B)  depreciation.
C)  apportioning.
D)  crediting.
E)  distributing.F) A) and E)
G) A) and C)

Question 3

The purpose of an audit is to ensure that financial statements have been prepared according to

Accepted Answer

A)  the particular company's standards.
B)  the industry's standards.
C)  generally accepted accounting principles.
D)  international accounting standards.
E)  the standards of certified public accountants.F) C) and D)
G) B) and E)

Question 4

A(n)  ____ is a summary of a firm's revenues and expenses during a specified accounting period, such as a year.

Accepted Answer

A)  income statement
B)  balance sheet
C)  capital statement
D)  statement of financial position
E)  statement of owners' equityF) A) and B)
G) B) and E)

Question 5

Which of the following statements about the Sarbanes-Oxley Act is incorrect?

Accepted Answer

A)  The act was passed in 1996.
B)  Because the act is complex, compliance is more expensive and time consuming for corporate management.
C)  Because of the act, the SEC was required to establish a federal oversight board.
D)  Because of the act, a corporation's chief executive and financial officers must certify financial reports.
E)  The act strengthened the penalty for destroying financial documents related to an audit.F) A) and D)
G) B) and C)

Question 6

The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct?

Accepted Answer

A)  David's owners' equity is $87,000.
B)  The owners' equity in David's is $61,000.
C)  David's liabilities are $148,000.
D)  The firm's liabilities are $61,000.
E)  The firm has more owners' equity than liabilities.F) A) and B)
G) A) and C)

Question 7

Intel decides to issue new stock in order to build a new facility and expand its operations. The receipt of cash from this stock issue would appear in the ____ section of the statement of cash flows.

Accepted Answer

A)  operating
B)  business
C)  equity
D)  investing
E)  financingF) A) and E)
G) A) and D)

Question 8

Which of the following statements is false?

Accepted Answer

A)  It is possible to compare one firm's accounting data with another firm's accounting data as long as both firms used generally accepted accounting procedures.
B)  Many managers compare the financial results from one accounting period with the results from previous accounting periods.
C)  Most corporations include in their annual reports comparisons of important elements of their financial statements for recent years.
D)  The format and information contained in one firm's financial statements are most likely to differ drastically from the format and information contained in another firm's financial statements.
E)  Many firms compare their financial results with industry averages.F) A) and D)
G) A) and C)

Question 9

All of the following are acceptable ways of stating the accounting equation except

Accepted Answer

A)  owners' equity = assets − liabilities.
B)  assets = liabilities + owners' equity.
C)  owners' equity − liabilities = assets.
D)  assets − liabilities = owners' equity.
E)  assets = shareholders' equity + liabilities.F) D) and E)
G) B) and D)

Question 10

Each month, Bath & Body Works pays employees wages, telephone bills, and salaries to accountants. These are all considered

Accepted Answer

A)  cost of goods sold.
B)  gross profit.
C)  sales allowances.
D)  operating expenses.
E)  current assets.F) A) and B)
G) A) and C)

Question 11

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

Accepted Answer

Answers will vary. Managerial accounting...

Question 12

A low inventory turnover can be improved by ordering merchandise in smaller quantities at more frequent intervals.

Accepted Answer

A) True 
 B)False

Question 13

APSCO Lighting, Inc., had a gross profit of $234,000 for the last twelve-month period. Operating expenses were $185,000. What was APSCO's net income before taxes?

Accepted Answer

A)  $490,000
B)  $234,000
C)  $185,000
D)  $49,000
E)  $41,000F) D) and E)
G) A) and B)

Question 14

The cost of goods sold divided by the average inventory equals the

Accepted Answer

A)  gross profit on operations.
B)  beginning inventory value.
C)  merchandise inventory.
D)  ending inventory value.
E)  inventory turnover.F) B) and D)
G) A) and E)

Question 15

​____ and ____ are the normal income statement designations for profit and loss for a business.

Accepted Answer

A)  ​Cash surplus; cash deficit
B)  ​Income overage; income deficit
C)  ​Surplus; deficit
D)  ​Gain; lossE) A) and B)
F) A) and C)

Question 16

​Jose is reviewing the operating expenses for his business. He notices that operating expenses are categorized as ___ expenses related to his business' marketing activities or ___ expenses incurred in managing the business.

Accepted Answer

A)  ​selling; general
B)  ​large; small
C)  ​current; long term
D)  ​E) All of the above
F) A) and D)

Question 17

What ratio is used to measure a firm's ability to pay its current liabilities and what does this ratio tell a manager? How can a low ratio be improved?

Accepted Answer

A firm's current ratio can be used to ev...

Question 18

The statement of cash flows illustrates the effects on cash of the operating, investing, and financing activities of a company for an accounting period.

Accepted Answer

A) True 
 B)False

Question 19

The debts of a business are called its liabilities.

Accepted Answer

A) True 
 B)False

Question 20

The financial statement that provides information about a firm's operating, investing, and financing activities during an accounting period is the

Accepted Answer

A)  balance sheet.
B)  income statement.
C)  cash flows statement.
D)  retained earnings statement.
E)  financial analysis statement.F) A) and B)
G) B) and C)

Exam 15: Using Management Information Systems and Accounting Information

What ratio is used to measure a firm's ability to pay its current liabilities and what does this ratio tell a manager? How can a low ratio be improved?

Correct AnswerverifiedA firm's current ratio can be used to ev...View AnswerShow Answer

The statement of cash flows for a business offers information on all of the following except

Correct AnswerverifiedShow Answer

A low inventory turnover can be improved by ordering merchandise in smaller quantities at more frequent intervals.

Correct AnswerverifiedShow Answer

Which of the following statements about the Sarbanes-Oxley Act is incorrect?

Correct AnswerverifiedShow Answer

The purpose of an audit is to ensure that financial statements have been prepared according to

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

APSCO Lighting, Inc., had a gross profit of $234,000 for the last twelve-month period. Operating expenses were $185,000. What was APSCO's net income before taxes?

Correct AnswerverifiedShow Answer

All of the following are acceptable ways of stating the accounting equation except

Correct AnswerverifiedShow Answer

​____ and ____ are the normal income statement designations for profit and loss for a business.

Correct AnswerverifiedShow Answer

Each month, Bath & Body Works pays employees wages, telephone bills, and salaries to accountants. These are all considered

Correct AnswerverifiedShow Answer

The statement of cash flows illustrates the effects on cash of the operating, investing, and financing activities of a company for an accounting period.

Correct AnswerverifiedShow Answer

Intel decides to issue new stock in order to build a new facility and expand its operations. The receipt of cash from this stock issue would appear in the ____ section of the statement of cash flows.

Correct AnswerverifiedShow Answer

The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct?

Correct AnswerverifiedShow Answer

​Jose is reviewing the operating expenses for his business. He notices that operating expenses are categorized as ___ expenses related to his business' marketing activities or ___ expenses incurred in managing the business.

Correct AnswerverifiedShow Answer

The financial statement that provides information about a firm's operating, investing, and financing activities during an accounting period is the

Correct AnswerverifiedShow Answer

The process of spreading the cost of a fixed asset over the asset's useful life is called

Correct AnswerverifiedShow Answer

The cost of goods sold divided by the average inventory equals the

Correct AnswerverifiedShow Answer

What are the differences between managerial accounting and financial accounting? From a career standpoint, which type do you prefer and why?

Correct AnswerverifiedAnswers will vary. Managerial accounting...View AnswerShow Answer

A(n) ____ is a summary of a firm's revenues and expenses during a specified accounting period, such as a year.

Correct AnswerverifiedShow Answer

The debts of a business are called its liabilities.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A firm's current ratio can be used to ev...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

and are the normal income statement designations for profit and loss for a business.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Jose is reviewing the operating expenses for his business. He notices that operating expenses are categorized as _ expenses related to his business' marketing activities or _ expenses incurred in managing the business.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Answers will vary. Managerial accounting...
View Answer

Correct Answer
verified

Correct Answer
verified