Question 1

The accounting book or computer program where each day's transactions are first recorded is called a:

Accepted Answer

A)  journal.
B)  general ledger.
C)  balance sheet.
D)  posting workbook.E) B) and D)
F) B) and C)

Question 2

On December 31,2001,Saskatoon Laboratories had assets of $235,000 and owners' equity of $84,000.We can conclude that Saskatoon Laboratories must have:

Accepted Answer

A)  suffered a net loss of $151,000.
B)  experienced a cash inflow of $319,000.
C)  paid a dividend of $3.00 per share.
D)  total liabilities of $151,000.E) B) and C)
F) All of the above

Question 3

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

Accepted Answer

A)  determine whether account figures in ledgers are correct and balanced.
B)  ensure the audit was done correctly.
C)  obtain an estimate of the amount of taxes the firm owes.
D)  verify the validity of last year's balance sheet before beginning the next accounting cycle.E) All of the above
F) A) and D)

Question 4

Financial accounting information about a firm is useful:

Accepted Answer

A)  to managers,owners,creditors,employees,and the government.
B)  only to managers within the firm.
C)  only to the tax authorities and other government agencies that regulate the firm.
D)  only to creditors and stockholders of the firm.E) B) and D)
F) A) and B)

Question 5

The basic earnings per share ratio does not take stock options,warrants,and preferred stock into account.

Accepted Answer

A) True 
 B)False

Question 6

What is the difference between a private accountant and a public accountant?

Accepted Answer

A public accountant provides s...

Question 7

An income statement will present the net income (or net loss)of a firm resulting from the operations of the organization over a period of time.

Accepted Answer

A) True 
 B)False

Question 8

Profitability ratios are often used to measure management's performance.

Accepted Answer

A) True 
 B)False

Question 9

The supplier of coffee beans to the local coffee shop now demands to be paid on a cash basis for all purchases.The supplier has done this because:

Accepted Answer

A)  the coffee shop now stays open 24 hours a day.
B)  the coffee shop has been very slow in paying for previous purchases.
C)  the coffee shop is over 50 miles away from the supplier.
D)  the coffee shop's purchases are growing.E) A) and C)
F) C) and D)

Question 10

Liabilities are what the firm owes to others.

Accepted Answer

A) True 
 B)False

Question 11

Financial accounting is used to provide information and analysis that managers within the organization can use to assist them in decision making.

Accepted Answer

A) True 
 B)False

Question 12

An income statement reports what a company owns and owes on a certain day.

Accepted Answer

A) True 
 B)False

Question 13

The specialized accounting book in which information from journals is accumulated into specific categories is called a:

Accepted Answer

A)  balance sheet.
B)  trial balance.
C)  journal.
D)  ledger.E) B) and D)
F) A) and C)

Question 14

If the total assets of a business are $107,000 and its liabilities are $75,000,which of the following statements is correct?

Accepted Answer

A)  The current assets are worth $32,000.
B)  The owners' equity is $32,000.
C)  The net income for the period is $32,000.
D)  The owners' equity equals $182,000.E) None of the above
F) A) and B)

Question 15

Prattville Manufacturing has applied for a short-term loan with CIBC.The loan officers of the bank are likely to look carefully at Prattville's liquidity ratios before they decide to grant the loan.

Accepted Answer

A) True 
 B)False

Question 16

The current ratio is found by dividing the firm's total assets by its total liabilities.

Accepted Answer

A) True 
 B)False

Question 17

Bookkeepers would normally be involved with:

Accepted Answer

A)  recording business transactions.
B)  preparing financial statements.
C)  interpreting accounting data.
D)  approving decisions about major expenditures.E) C) and D)
F) B) and D)

Question 18

Accounting transactions are very important to a firm's operations.All of the following activities would affect account balances  EXCEPT :

Accepted Answer

A)  buying and selling goods and services.
B)  paying taxes.
C)  using supplies.
D)  forecasting consumer demand.E) None of the above
F) A) and B)

Question 19

Accounting includes______ information related to financial transactions.

Accepted Answer

A)  buying
B)  distributing
C)  interpreting
D)  sellingE) A) and B)
F) None of the above

Question 20

A(n) ______is a yearly statement of the financial condition,progress and expectations of an organization.

Accepted Answer

A)  mission statement
B)  independent audit
C)  balance sheet
D)  annual reportE) None of the above
F) A) and D)

Exam 16: Understanding Accounting and Financial Information

The basic earnings per share ratio does not take stock options,warrants,and preferred stock into account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A(n) ______is a yearly statement of the financial condition,progress and expectations of an organization.

Correct AnswerverifiedShow Answer

On December 31,2001,Saskatoon Laboratories had assets of $235,000 and owners' equity of $84,000.We can conclude that Saskatoon Laboratories must have:

Correct AnswerverifiedShow Answer

An income statement reports what a company owns and owes on a certain day.

Correct AnswerverifiedShow Answer

Financial accounting information about a firm is useful:

Correct AnswerverifiedShow Answer

What is the difference between a private accountant and a public accountant?

Correct AnswerverifiedA public accountant provides s...View AnswerShow Answer

The current ratio is found by dividing the firm's total assets by its total liabilities.

Correct AnswerverifiedShow Answer

Accounting includes______ information related to financial transactions.

Correct AnswerverifiedShow Answer

Liabilities are what the firm owes to others.

Correct AnswerverifiedShow Answer

An income statement will present the net income (or net loss)of a firm resulting from the operations of the organization over a period of time.

Correct AnswerverifiedShow Answer

Accounting transactions are very important to a firm's operations.All of the following activities would affect account balances EXCEPT :

Correct AnswerverifiedShow Answer

Bookkeepers would normally be involved with:

Correct AnswerverifiedShow Answer

The accounting book or computer program where each day's transactions are first recorded is called a:

Correct AnswerverifiedShow Answer

The specialized accounting book in which information from journals is accumulated into specific categories is called a:

Correct AnswerverifiedShow Answer

Financial accounting is used to provide information and analysis that managers within the organization can use to assist them in decision making.

Correct AnswerverifiedShow Answer

If the total assets of a business are $107,000 and its liabilities are $75,000,which of the following statements is correct?

Correct AnswerverifiedShow Answer

Profitability ratios are often used to measure management's performance.

Correct AnswerverifiedShow Answer

Prattville Manufacturing has applied for a short-term loan with CIBC.The loan officers of the bank are likely to look carefully at Prattville's liquidity ratios before they decide to grant the loan.

Correct AnswerverifiedShow Answer

The supplier of coffee beans to the local coffee shop now demands to be paid on a cash basis for all purchases.The supplier has done this because:

Correct AnswerverifiedShow Answer

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A public accountant provides s...
View Answer

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