Question 1

The accounting profession is divided into five key working areas,two of which are:

Accepted Answer

A)  auditing and managerial accounting.
B)  forecasting and logistical accounting.
C)  inventory control and budgeting.
D)  income accounting and expenditure accounting.E) None of the above
F) All of the above

Question 2

The job of reviewing and evaluating the records used to prepare a company's financial statements is referred to as compliance.

Accepted Answer

A) True 
 B)False

Question 3

Horst works as an accountant for a mid-sized retail store.He has just completed a trial balance that turned up no unexpected problems.Horst's next major task is likely to be:

Accepted Answer

A)  conducting the full audit.
B)  preparing a tax return for the company.
C)  preparing the store's balance sheet and other major financial statements.
D)  taking a well-deserved vacation,since he has just finished the last step in the accounting cycle for the current period.E) None of the above
F) A) and B)

Question 4

Financial accounting involves activities such as preparing budgets and measuring production costs.

Accepted Answer

A) True 
 B)False

Question 5

_________ involves the recording of business transactions.

Accepted Answer

A)  Marketing
B)  Bookkeeping
C)  Auditing
D)  EconomicsE) All of the above
F) A) and B)

Question 6

What group or groups are interested in a company's financial statements?

Accepted Answer

Owners,creditors,sup...

Question 7

The purpose of the current ratio is to evaluate the firm's ability to:

Accepted Answer

A)  generate sales with a given level of current assets.
B)  utilize current assets profitably.
C)  pay its bills in the short run.
D)  effectively use borrowed funds.E) None of the above
F) A) and B)

Question 8

One of the problems with current accounting procedures is that there is no way for firms to systematically write off the costs of property and equipment over time.

Accepted Answer

A) True 
 B)False

Question 9

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

Accepted Answer

A) True 
 B)False

Question 10

Financial accountants prepare reports for owners,creditors,suppliers,and others outside of the organization.

Accepted Answer

A) True 
 B)False

Question 11

The __________ is a six step procedure that results in the preparation and analysis of the major financial statements.

Accepted Answer

A)  double-entry method
B)  financial management process
C)  financial performance appraisal
D)  accounting cycleE) A) and B)
F) A) and C)

Question 12

For firms that sometimes have difficulty selling their inventory of goods,the current ratio is likely to be a better measure of liquidity than the acid-test ratio.

Accepted Answer

A) True 
 B)False

Question 13

A firm's annual report is a yearly statement of the financial condition,progress,and expectations of the organization during one year.

Accepted Answer

A) True 
 B)False

Question 14

Liquidity ratios are of particular importance to stockholders,but have little relevance for creditors.

Accepted Answer

A) True 
 B)False

Question 15

Financial accounting and managerial accounting are similar in that they both provide information intended primarily for people inside the organization.

Accepted Answer

A) True 
 B)False

Question 16

__________ earnings per share measures the amount of profit a firm earns per share of outstanding common stock when preferred stock,stock options,warrants and convertible debt securities are also taken into account.

Accepted Answer

A)  Basic
B)  Diluted
C)  Restricted
D)  Broad-basedE) A) and D)
F) All of the above

Question 17

A firm's ________ reports the profit or loss for the firm over a specified time period.

Accepted Answer

A)  income statement
B)  balance sheet
C)  cash flow statement
D)  bank statementE) A) and B)
F) B) and D)

Question 18

Computerized accounting programs have eliminated the need to prepare a trial balance.

Accepted Answer

A) True 
 B)False

Question 19

If a firm can reduce its cost of goods sold and continue to sell its product for the same price,we would expect the firm to enjoy an increase in its ________.

Accepted Answer

A)  revenue
B)  liabilities
C)  employee turnover
D)  gross marginE) B) and D)
F) A) and B)

Question 20

Jamal is an accountant employed by Acctex,Inc.Jamal is an example of a public accountant.

Accepted Answer

A) True 
 B)False

Exam 16: Understanding Accounting and Financial Information

The job of reviewing and evaluating the records used to prepare a company's financial statements is referred to as compliance.

Correct AnswerverifiedShow Answer

__________ earnings per share measures the amount of profit a firm earns per share of outstanding common stock when preferred stock,stock options,warrants and convertible debt securities are also taken into account.

Correct AnswerverifiedShow Answer

Liquidity ratios are of particular importance to stockholders,but have little relevance for creditors.

Correct AnswerverifiedShow Answer

For firms that sometimes have difficulty selling their inventory of goods,the current ratio is likely to be a better measure of liquidity than the acid-test ratio.

Correct AnswerverifiedShow Answer

A firm's ________ reports the profit or loss for the firm over a specified time period.

Correct AnswerverifiedShow Answer

Financial accounting and managerial accounting are similar in that they both provide information intended primarily for people inside the organization.

Correct AnswerverifiedShow Answer

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

Correct AnswerverifiedShow Answer

Computerized accounting programs have eliminated the need to prepare a trial balance.

Correct AnswerverifiedShow Answer

Jamal is an accountant employed by Acctex,Inc.Jamal is an example of a public accountant.

Correct AnswerverifiedShow Answer

The __________ is a six step procedure that results in the preparation and analysis of the major financial statements.

Correct AnswerverifiedShow Answer

What group or groups are interested in a company's financial statements?

Correct AnswerverifiedOwners,creditors,sup...View AnswerShow Answer

Horst works as an accountant for a mid-sized retail store.He has just completed a trial balance that turned up no unexpected problems.Horst's next major task is likely to be:

Correct AnswerverifiedShow Answer

One of the problems with current accounting procedures is that there is no way for firms to systematically write off the costs of property and equipment over time.

Correct AnswerverifiedShow Answer

A firm's annual report is a yearly statement of the financial condition,progress,and expectations of the organization during one year.

Correct AnswerverifiedShow Answer

Financial accounting involves activities such as preparing budgets and measuring production costs.

Correct AnswerverifiedShow Answer

_________ involves the recording of business transactions.

Correct AnswerverifiedShow Answer

The purpose of the current ratio is to evaluate the firm's ability to:

Correct AnswerverifiedShow Answer

Financial accountants prepare reports for owners,creditors,suppliers,and others outside of the organization.

Correct AnswerverifiedShow Answer

If a firm can reduce its cost of goods sold and continue to sell its product for the same price,we would expect the firm to enjoy an increase in its ________.

Correct AnswerverifiedShow Answer

The accounting profession is divided into five key working areas,two of which are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Owners,creditors,sup...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified