1. What is the relationship between daily activities and accounting in companies? Select one: a. Accounting does not relate to daily business activities. b. Companies need accounting when they receive and pay a bill. c. Only daily sales activities involve accounting.

2.What is the function of a trial balance? Select one: a. A trial balance has no function when a company uses the manual system. b. A trial balance presents important graphs and notes to managers. c. A trial balance shows all transactions in an account, which facilitates research. d. A trial balance shows summarized balances by account, which facilitates analysis and financial statement compilation.

3.Which of the following items are listed as separate line items on an income statement in order to facilitate analysis and understanding? (Select all that apply.) Select one or more: a. A gain on sale of a major division of a company b. An increase in the sale price by more than 20% c. The effect on prior years of change in depreciation method d. A loss due to fire

4.Which of the following is an example of an investing activity shown in the cash flow statement? Select one: a. Cash received from customers b. Cash received from selling old computer servers c. Cash received from owners of a company

5.What do liquidity ratios measure? Select one: a. The assets that a company turns over b. A company's ability to meet its current obligations c. A company's change in cash throughout the years d. The bank reconciliations that a company performs during a year

6. What is cost accounting? Select one: a. It is part of financial accounting. It is often used to provide data to investors. b. It is part of management accounting. It is often used by manufacturing companies. c. It is part of financial accounting. It often does not include enough details to be useful to managers.

7.Which standard financial statement would you use if you want to know details of revenues and expenses? Select one: a. Cash flow statement b. Balance sheet c. Income statement d. Break-even analysis

8.What is a limitation of ratios? Select one: a. Communication of complex financial matters b. Easier evaluation of a company c. Accounting information