Question 1

The area of accounting that provides managers of an organization with information they need to make decisions is called:

Accepted Answer

A)  tax accounting.
B)  informational accounting.
C)  financial accounting.
D)  managerial accounting.E) A) and D)
F) None of the above

Question 2

A firm's financial statements represent a health report regarding the condition of the firm.

Accepted Answer

A) True 
 B)False

Question 3

The firm's most valuable assets are listed at top of its balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

Leverage ratios are concerned with the extent to which a firm relies on borrowed funds in its operations.

Accepted Answer

A) True 
 B)False

Question 5

Calgary Chemicals plans to utilize its computers to provide continuous auditing of their financial statements.One obvious benefit of this technology would be:

Accepted Answer

A)  less scrutiny from agencies such as Revenue Canada.
B)  to shift financial decision making from human beings to programmed technology.
C)  early detection of financial problems.
D)  a reduction in the number of accountants required by the firm.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A)  liquidity
B)  performance
C)  leverage
D)  liabilityE) None of the above
F) A) and D)

Question 7

A basic purpose of accounting is to:

Accepted Answer

A)  track employee productivity.
B)  act as a tool for the human relations department.
C)  provide financial information that is useful to decision makers.
D)  show a profit.E) A) and C)
F) A) and D)

Question 8

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

Accepted Answer

A)  accounting cycle
B)  financial performance appraisal
C)  double-entry method
D)  financial management processE) B) and C)
F) All of the above

Question 9

Owners,creditors,suppliers,employees,and the government all are users of accounting information.

Accepted Answer

A) True 
 B)False

Question 10

Identify the three key financial statements that corporations are required to prepare and describe the type of information found on each.

Accepted Answer

financing activities.Cash flows from ope...

Question 11

If a firm has $100,000 in assets and liabilities of $62,000,then the owners' equity is equal to $162,000.

Accepted Answer

A) True 
 B)False

Question 12

Today's computerized accounting programs are:

Accepted Answer

A)  too expensive for most small businesses.
B)  easily affordable,but seldom necessary for the simple needs of the typical small business.
C)  so sophisticated that they can make most financial decisions without the aid of an accountant.
D)  very helpful for small business owners who lack strong accounting support within their companies.E) All of the above
F) B) and C)

Question 13

Activities of managerial accountants include measuring and reporting the costs of production,marketing,and other functions within the organization.

Accepted Answer

A) True 
 B)False

Question 14

Many business decisions are made in hopes of improving a firm's "bottom line." Which of the following financial statements will reflect a firm's "bottom line?"

Accepted Answer

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

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Accounting supports the four functions of management and is designed to assist decision makers-both internal and external.

Accepted Answer

A) True 
 B)False

Question 17

Expenses are what the business owes to others.

Accepted Answer

A) True 
 B)False

Question 18

Accounting and bookkeeping are terms used for essentially the same activity in an organization.

Accepted Answer

A) True 
 B)False

Question 19

Liquidity refers to how fast an asset can be converted into cash.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are steps included in the accounting cycle  EXCEPT 
:

Accepted Answer

A)  forecasting of expenses and revenues.
B)  preparing a trial balance.
C)  posting journal information into ledgers.
D)  recording information into journals.E) A) and B)
F) All of the above

Exam 16: Understanding Accounting and Financial Information

Identify the three key financial statements that corporations are required to prepare and describe the type of information found on each.

Correct Answerverifiedfinancing activities.Cash flows from ope...View AnswerShow Answer

Many business decisions are made in hopes of improving a firm's "bottom line." Which of the following financial statements will reflect a firm's "bottom line?"

Correct AnswerverifiedShow Answer

Expenses are what the business owes to others.

Correct AnswerverifiedShow Answer

Leverage ratios are concerned with the extent to which a firm relies on borrowed funds in its operations.

Correct AnswerverifiedShow Answer

A firm's financial statements represent a health report regarding the condition of the firm.

Correct AnswerverifiedShow Answer

A basic purpose of accounting is to:

Correct AnswerverifiedShow Answer

Accounting supports the four functions of management and is designed to assist decision makers-both internal and external.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Owners,creditors,suppliers,employees,and the government all are users of accounting information.

Correct AnswerverifiedShow Answer

If a firm has $100,000 in assets and liabilities of $62,000,then the owners' equity is equal to $162,000.

Correct AnswerverifiedShow Answer

All of the following are steps included in the accounting cycle EXCEPT :

Correct AnswerverifiedShow Answer

Today's computerized accounting programs are:

Correct AnswerverifiedShow Answer

Accounting and bookkeeping are terms used for essentially the same activity in an organization.

Correct AnswerverifiedShow Answer

The firm's most valuable assets are listed at top of its balance sheet.

Correct AnswerverifiedShow Answer

The area of accounting that provides managers of an organization with information they need to make decisions is called:

Correct AnswerverifiedShow Answer

Calgary Chemicals plans to utilize its computers to provide continuous auditing of their financial statements.One obvious benefit of this technology would be:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Activities of managerial accountants include measuring and reporting the costs of production,marketing,and other functions within the organization.

Correct AnswerverifiedShow Answer

Liquidity refers to how fast an asset can be converted into cash.

Correct AnswerverifiedShow Answer

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financing activities.Cash flows from ope...
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