Question 1

Revenues,cost of goods,and expenses would all be reported on a firm's income statement.

Accepted Answer

A) True 
 B)False

Question 2

Return on equity divides ____ by _.

Accepted Answer

A)  income;number of shares outstanding
B)  net income;net sales
C)  net income after tax;total owners' equity
D)  net income;taxesE) None of the above
F) B) and D)

Question 3

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

As Hector was packing to return to Simon Fraser University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,stereo system,and DVD player.An accountant would list all of these as Hector's:

Accepted Answer

A)  liabilities.
B)  assets.
C)  owners' equity.
D)  intangibles.E) A) and D)
F) B) and C)

Question 6

is the dollar value of what is received for goods sold,services rendered,and money received from other financial sources.

Accepted Answer

A)  Gross margin
B)  Cost of goods sold
C)  Net income
D)  RevenueE) A) and D)
F) A) and B)

Question 7

Carlisle Communications is preparing its cash flow statement.Among other things,this statement will show:

Accepted Answer

A)  cash inflows and cash outflows that resulted from financing activities.
B)  net income from operations after taxes.
C)  general expenses and operating expenses.
D)  the total owners' equity for the firm.E) A) and B)
F) A) and D)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Accepted Answer

A)  inventory valuation.
B)  asset disbursement.
C)  cash flow.
D)  profit and loss.E) A) and B)
F) A) and C)

Question 10

In large companies,certified internal auditors are usually responsible for preparing tax returns and developing tax strategies for businesses.

Accepted Answer

A) True 
 B)False

Question 11

Expenses a firm incurs for insurance,office salaries,and rent would be classified as:

Accepted Answer

A)  general expenses on an income statement.
B)  selling expenses on an income statement.
C)  current liabilities on a balance sheet.
D)  general expenses on a cash flow statement.E) None of the above
F) A) and C)

Question 12

One of the most important performance ratios is what?

Accepted Answer

A)  GAAP
B)  P/E
C)  P and L
D)  EPSE) None of the above
F) All of the above

Question 13

The basic earnings per share ratio does not take what into account?

Accepted Answer

A)  stock options
B)  net income
C)  taxes
D)  number of shares outstandingE) A) and B)
F) A) and C)

Question 14

Citizens and special interest groups often have interest in the information generated by government accounting.

Accepted Answer

A) True 
 B)False

Question 15

Gross margin represents the amount a firm earns by buying (or making)and selling merchandise.

Accepted Answer

A) True 
 B)False

Question 16

The preparation of financial statements for people outside the firm (creditors,unions,suppliers,and others) is the goal of:

Accepted Answer

A)  cost accounting.
B)  auditing.
C)  financial accounting.
D)  managerial accounting.E) A) and C)
F) B) and C)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The cash flow statement shows a firm's revenues,costs of goods sold,expenses,and net income.

Accepted Answer

A) True 
 B)False

Question 19

The purpose of liquidity ratios is to indicate the degree to which a firm relies on borrowed funds in its operations.

Accepted Answer

A) True 
 B)False

Question 20

Jim works in the accounting department at the Brunswick Sunflower Corporation,where it is his job to record all transactions into journals.After completing this task,the next step in the accounting process is to:

Accepted Answer

A)  prepare the firm's financial statements.
B)  determine the tax liability of the firm.
C)  balance the difference between assets and liabilities.
D)  post the information into ledgers.E) All of the above
F) A) and B)

Exam 16: Understanding Accounting and Financial Information

As Hector was packing to return to Simon Fraser University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,stereo system,and DVD player.An accountant would list all of these as Hector's:

Correct AnswerverifiedShow Answer

Citizens and special interest groups often have interest in the information generated by government accounting.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gross margin represents the amount a firm earns by buying (or making)and selling merchandise.

Correct AnswerverifiedShow Answer

Expenses a firm incurs for insurance,office salaries,and rent would be classified as:

Correct AnswerverifiedShow Answer

The purpose of liquidity ratios is to indicate the degree to which a firm relies on borrowed funds in its operations.

Correct AnswerverifiedShow Answer

The preparation of financial statements for people outside the firm (creditors,unions,suppliers,and others) is the goal of:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Revenues,cost of goods,and expenses would all be reported on a firm's income statement.

Correct AnswerverifiedShow Answer

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

Correct AnswerverifiedShow Answer

One of the most important performance ratios is what?

Correct AnswerverifiedShow Answer

Return on equity divides ____ by _.

Correct AnswerverifiedShow Answer

Carlisle Communications is preparing its cash flow statement.Among other things,this statement will show:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Correct AnswerverifiedShow Answer

The basic earnings per share ratio does not take what into account?

Correct AnswerverifiedShow Answer

In large companies,certified internal auditors are usually responsible for preparing tax returns and developing tax strategies for businesses.

Correct AnswerverifiedShow Answer

The cash flow statement shows a firm's revenues,costs of goods sold,expenses,and net income.

Correct AnswerverifiedShow Answer

Jim works in the accounting department at the Brunswick Sunflower Corporation,where it is his job to record all transactions into journals.After completing this task,the next step in the accounting process is to:

Correct AnswerverifiedShow Answer

is the dollar value of what is received for goods sold,services rendered,and money received from other financial sources.

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

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