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Exam 17: Understanding Accounting and Financial Information

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Question 201

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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.

A) True
B) False

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Question 202

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Stockholders of a company in a risky market environment would expect lower return on equity ratio than stockholders in a less risky market.

A) True
B) False

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Question 203

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

As an accountant,Joe Billing's responsibilities include:

Debts owed by a business are called __________.

Budget preparation is one aspect of managerial accounting.

Allison Robards is the owner of Backstreet Books,a small eclectic style bookstore in a bustling college town.Allison prides herself in selecting hard to find books and magazines that her clientele enjoy.Recently,Allison is experiencing a cash flow shortage,and she is concerned that she may be purchasing too many copies of each title.Having recently completed a business class,you suggest to Allison that she calculate the ______________ ratio for her store,and then compare it to other stores in her industry.

The Statement of Cash flows identifies cash receipts and disbursements that result ______________.

A comparison of bookkeeping and accounting indicates that:

___________ refers to the difference between cash coming into the firm and cash leaving the firm.

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

Preferred Pet Care Clinic,Inc is a mobile veterinary care company that travels to its clients' homes to administer veterinary care to well and sick pets.Its business is booming,with a full schedule of appointments each week.On a weekly basis,the office manager orders a larger amount of vaccines,antibiotics,and other products from its suppliers with the understanding that it will pay for these supplies in one month's time.A sizeable percentage of Preferred Pet Care's clients are elderly persons who are on fixed incomes.These customers eventually pay their bills,but usually not upon receipt of service.It sometimes takes them upwards of two months to remit.As an accounting intern willing to advise the owner,which of the following statements is important to your analysis?

The return on sales ratio measures a firm's use of leverage.

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 = ________.

As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information: Peak Performance's debt to owners equity ratio (rounded to the nearest tenth of a percent) is:

Posting is a step in the accounting cycle that involves transferring information from the journal into the appropriate accounts in a ledger.

The equipment a firm owns and the money it has in its bank account are considered assets.