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Exam 16: Understanding Accounting and Financial Information

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Question 31

True/False

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Rent,salaries,insurance,and amortization are all examples of the cost of goods sold.

A) True
B) False

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Question 32

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Rent,amortization,and salaries are all examples of:

A) expenses.
B) owners' equity.
C) liabilities.
D) assets.

E) All of the above
F) None of the above

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Question 33

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refers to how fast an asset could be converted into cash.

Over the past month,Monica noted that she disbursed $6,347 in payments for operations in her travel agency and received $6,189 in cash receipts for services rendered.She had no cash receipts or disbursements from investments or financing activities.Thus Monica had a:

To find out details of the maintenance costs,within the accounting system,you should refer to the ledger.

McCartney Consulting Group is a management-consulting firm that provides its expertise to businesses that employ its services.Since it does not hold an inventory of goods or produce any goods itself:

The debt to owners' equity ratio is a common type of liquidity ratio.

In addition to the mechanical tasks of recording and classifying accounting information,the best accounting software programs currently available for small businesses have the ability to make financial decisions,thus eliminating the need for owners of small businesses to consult with accountants.

How many professional accounting designations does Canada have?

Brand names such as Coca-Cola and McDonald's are examples of fixed assets.

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

The accounting statement that reports cash receipts and disbursements for a business is called the:

Assets are reported on the balance sheet.

Liabilities are reported on the income statement.

A balance sheet lists assets in order of their _______.

Accounting information is not relevant for non-profit organizations.

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

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

The individuals in a firm that are responsible for the development of strategies to minimize taxes are called:

Jill wants to start her own business,but knows little about how to set up an accounting system or interpret financial information."I'm not worried about accounting," she tells her friends."I'll just hire a part-time bookkeeper to handle all that type of stuff,and focus my attention on what I like-finding ways to satisfy my customers." Which of the following is the best response to Jill's comments?