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Exam 17: Understanding Accounting and Financial Information

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Question 61

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The accounting book that provides all the information about a single account in one place is called the ledger.

A) True
B) False

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Question 62

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The cost of goods sold reflects the selling price of the merchandise sold over a period of time.

A) True
B) False

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Question 63

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

Explain the differences between managerial and financial accounting,and give examples of the types of problems and issues examined by each of these areas of accounting.

The main reason an accountant would conduct a trial balance is to:

_________ refers to how quickly an asset can be converted into cash.

Skilled professionals who are responsible for the development of strategies to minimize taxes are called:

Peak Performance Sporting Goods Company has reported net income after taxes = $3,750,000,with 18,250,000 shares outstanding.Basic Earning per Share for Peak Performance = _________.

A firm's basic earnings per share measures how much profit was earned for each dollar invested by the firm's owners.

Accounting involves both the recording and the interpreting of financial events.

The current ratio is a type of ________ ratio.

An independent audit is an evaluation and unbiased opinion about the accuracy of a company's financial statements.

Becky Hunter is an accountant employed by FAF Enterprises.Recently she has spent much of her time working on defining measures of costs for the production department and checking to ensure that various departments are staying within their budgets.Becky is a:

Purchasing insurance,paying employees,and using supplies are examples of financial transactions.

The Internal Revenue Service is responsible for establishing accounting standards used by accountants working in government accounting.

The __________ sets accounting standards used in government accounting.

The purpose of a trial balance is to:

Jamal is an accountant employed full-time by The Barkley Company.Jamal is an example of a public accountant.

Bark Three Times Pet Store recently hired an accountant to make sense of each day's transactions,and keep better financial records for the business.The accountant showed the owner that the ledger in a computerized accounting system would automatically take entries and post them to the correct accounts in the ledger,making the bookkeeping tasks much easier.

Marshall McBride inherited $10,000 from his Great Aunt Marth A.He invested $5,000 in a new,risky start-up venture,10^th Generation,Inc. ,and the other $5,000 in Major Chemicals,Inc,a well-known chemical company that's been around for years.Today,his financial planner called to inform him that the Return on Equity on 10^th Generation = 6.28%;and,Return on Equity on Major Chemicals = 10.50%.Which of the following facts is important information for Marshall McBride?