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What is the relationship between employee motivation and accounting?

Select one:

a.There is no relationship.

b.Accounting reports can motivate employees.

c.Accounting motivates only accountants.

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How does accounting affect daily activities?

Select one:

a.Accounting captures daily business transactions for future reporting.

b.Accounting does not affect daily activities.

c.Accounting does not affect daily activities, except when a company pays a bill.

d.Accounting affects daily activities that require graphs and other graphics.

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Which of the following statements correctly describes how accounting helps managers?

Select one:

a.Accounting provides better ways to document meeting minutes.

b.Accounting centralizes and organizes processes.

c.Accounting provides better ways to conduct customer surveys.

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A company plans to spend $40,000 on advertising 5 years from now. What kind of goal is this?

Select one:

a.It is a mid-term goal.

b.It is a short-term goal.

c.It is not a goal.

d.It is a long-term goal.

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How can accounting minimize company losses?

Select one:

a.Accounting can predict the future with certainty.

b.Accounting can show managers information that can help minimize losses.

c.Accounting can demonstrate companies' exact total expenses for the next year.

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Which of these statements describes a limitation of accounting information?

Select one:

a.Accounting does not capture information about a company's reputation.

b.Accounting is usually unreliable.

c.Accounting information is useful only to third parties, not internal users.

d.Computers do not help accounting.

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What is the difference between a chart of accounts and a general ledger?

Select one:

a.A chart of accounts contains graphs and notes, but a general ledger does not.

b.A chart of accounts contains information about budgets. A general ledger contains account numbers, descriptions, and graphs (one graph per account).

c.Only managers use charts of accounts, whereas investors use general ledgers.

d.A chart of accounts contains account numbers and descriptions. A general ledger contains account numbers, descriptions, and numbers that reflect transactions in each account.

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Which of these statements correctly describe the chart of accounts and the general ledger? (Select all that apply.)

Select one or more:

a.The chart of accounts is made up of graphs and detailed notes.

b.The chart of accounts is a list of accounts that includes numbers and descriptions.

c.The general ledger is a list of accounts that includes numbers, descriptions, and changes in those accounts.

d.The general ledger is known as the core of any accounting system.

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Which of the following statements correctly describes computerized accounting?

Select one:

a.Companies rarely use computerized accounting.

b.Companies commonly use computerized accounting.

c.Computerized accounting requires the same amount of time as manual accounting.

d.Computerized accounting is usually much slower than manual accounting.

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Which of the following items are parts of the traditional accounting cycle? (Select all that apply.)

Select one or more:

a.Entering transactions into the accounting system

b.Deleting all cash transactions

c.Closing the accounting books

d.Compiling financial statements

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What is the basic equation of an income statement?

Select one:

a.Assets = Revenues - Expenses

b.Net income or loss = Revenues - Expenses

c.Assets = Liabilities + Equity

d.Equity = Cash inflows - Cash outflows

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What is revenue on an income statement?

Select one:

a.Costs related to transportation

b.Income that a competitor generates

c.Costs that manufacturing generates

d.Income that a company generates

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Revenues can be classified in an income statement to facilitate understanding of financial information. Which of the following is a type of revenue?

Select one:

a.Operating revenue

b.Graphic revenue

c.Quick revenue

d.Long-term revenue

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How are revenues usually listed on an income statement?

Select one:

a.Revenues are usually listed after expenses, near the bottom of the income statement. Revenues are related to sales or service rendered by the company. Without revenues, companies cannot stay open for long.

b.Revenues are usually listed as notes to the income statement. Revenues are related to investments by owners.

c.Revenues are usually listed at the top of the income statement. Revenues are related to sales or service rendered by the company. Without revenues, companies cannot stay open for long.

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Which of the following statements correctly describes net income or loss?

Select one:

a.Net income or loss is often used in bank reconciliations.

b.Net income or loss is shown as the first item on an income statement.

c.Net income or loss is the result of a company's revenues less expenses.

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Larry's company owes $100,000 to the bank on a note due with interest 3 years from now. How would this note be classified on the balance sheet?

Select one:

a.The balance sheet would show the $100,000 as a current liability.

b.The balance sheet would show the $100,000 as a current asset.

c.The balance sheet would show the $100,000 as a long-term liability.

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What are current assets?

Select one:

a.Those that a company will use within a year

b.Those that a company will use within five years

c.Those that a company will use next week only

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What are fixed assets?

Select one:

a.Items a company uses right away, such as cash

b.Assets a company disposes of immediately

c.Expensive items a company uses for longer than a year

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How does a balance sheet relate to a cash flow statement?

Select one:

a.Cash flow statements and balance sheets show marketing plan details.

b.The cash amount on a balance sheet relates to equity from a cash flow statement.

c.A cash flow statement analyzes the cash amount on a balance sheet.

d.These two reports are completely independent of each other.

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What are common items in the stockholder equity section of a corporation's balance sheet? (Select all that apply.)

Select one or more:

a.Extraordinary items

b.Retained earnings

c.Operating expenses

d.Capital stock

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A company issued stocks and received $250,000. Which section in the cash flow statement would list this transaction?

Select one:

a.Differential activities

b.Investing activities

c.Financing activities

d.Operating activities

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Which of these statements correctly describe the cash flow statement below? (Select all that apply.)Cash flow statementAs of June 30 2012Operating ActivitiesCollections from customers34,565.00Payments to suppliers(7,455.00)Payments for operating expenses(8,889.00)Payments for income taxes(1,788.00)Payments for interest(701.00)Cash provided by operating activities15,732.00Investing ActivitiesPurchase of equipment(10,000.00)Proceeds from sale of equipment2,000.00Cash used by investing activities(8,000.00)Financing ActivitiesProceeds from loan1,700.00Payments on loan(4,030.00)Payment of dividends(200.00)Cash provided by financing activities(2,530.00)Net increase in cash5,202.00Beginning cash1,409.00Ending cash6,611.00

Select one or more:

a.The company bought equipment for $10,000 with cash.

b.The company received a cash loan of $1,700.

c.The company's ending cash balance is $1,343.

d.The company received $8,000 from customers in cash.

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How is depreciation expense handled on a cash flow statement using the indirect method?

Select one:

a.Ten percent of depreciation is deducted from net income or loss, and the rest is ignored.

b.Depreciation expense is deducted from net income or loss.

c.Depreciation is added to extraordinary items.

d.Depreciation expense is added to net income or loss.

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Investing activities on the cash flow statement relate to __________.

Select one:

a.gains and losses on disposal of equipment

b.a company's daily operations

c.interest payments

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Which of the following correctly describes financing activities on a cash flow statement?

Select one:

a.Financing activities are usually listed as the first part of a cash flow statement.

b.Financing activities are usually listed as notes and graphs on a cash flow statement.

c.Financing activities are usually listed as the last part of a cash flow statement.

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Which statements correctly describe financial analysis? (Select all that apply.)

Select one or more:

a.Financial analysis is a tool to help managers focus on specific items not clearly visible on financial statements.

b.Financial analysis helps parties conduct bank and investment reconciliations.

c.Financial analysis can be conducted by comparing trends throughout the years.

Question27

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Bob reviews an income statement that includes percentages of how each item relates to sales. What kind of financial analysis is this?

Select one:

a.Ratio analysis

b.Horizontal analysis

c.Break-even analysis

d.Vertical analysis

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What are the three common ways to conduct financial analysis?

Select one:

a.Vertical, upright, and uplifting

b.Horizontal, vertical, and ratios

c.Simple, complex, and ratios

d.Horizontal, diagonal, and descriptive

Question29

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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

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What are the limitations of financial analysis, including ratios?

Select one:

a.There are no real limitations of financial analysis; any financial data can be analyzed.

b.Financial analysis targets only the future, not the present or past, which limits its usage.

c.Accounting information, the basis for analysis, excludes important information, such as a company's reputation.

d.Financial analysis is too complicated to use computerized systems, which limits its usage.

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How do managers use budgets?

Select one:

a.Managers usually ignore budgets and base their decisions on gut feelings.

b.Budgets help managers review bank and investment reconciliations.

c.Budgets guide managers on financial matters and help identify areas that are not going according to plan.

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Which statement best describes a budget?

Select one:

a.A budget is comprised of notes, not numbers.

b.A budget is an estimation of future revenues and expenses.

c.A budget is typical of financial accounting, not management accounting.

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What is a master budget?

Select one:

a.A budget that summarizes all the budgets in one document

b.A budget related to employee satisfaction

c.A budget for expenses only

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Fred owns a small manufacturing plant. His friend Paul also owns a manufacturing plant and has talked to Fred about issues he has found so far with his system. What is Paul likely to say? (Select all that apply.)

Select one or more:

a.You may have to tell your accountant to conduct reconciliations to ensure that the rates in the system make sense when compared to actual rates.

b.Beware of the high price to buy and maintain the cost accounting system.

c.Be sure that the cost accounting system picks up current stock prices from the Internet.

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Which standard financial statement would you use if you want to know details of cash inflows and outflows?

Select one:

a.Cash flow statement

b.Break-even analysis

c.Balance sheet

d.Income statement

Question37

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Which of the following are common accounting myths? (Select all that apply.)

Select one or more:

a.Accounting focuses only on math.

b.Accountants focus only on the past.

c.Accounting should be taught at culinary schools.

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Larry is starting a company and wonders why he needs an accounting system. He believes accounting reviews only past information, and because his company is new, there is no history to report and therefore there is no need for accounting. What would you tell him?

Select one:

a.Accounting focuses on more than the past. You can use accounting to find present information and plan for the future.

b.At this point, an accounting system will waste your time and money.

c.An accounting system can provide you with fake data about the past to guide your future operations.

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Which of the following is an example of accounting that uses the accrual basis?

Select one:

a.A company recognizes revenue when it provides a service to a client.

b.A company recognizes an expense when a bill is paid.

c.A company receives a bill but loses it and never pays it.

d.A company recognizes revenue when a client makes a payment on an invoice.

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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

Question41

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Why is the myth that accountants work only on taxes incorrect?

Select one:

a.Accountants ignore taxes as much as possible to avoid making biased decisions.

b.The myth is actually correct; a government mandate requires accountants to know about taxes.

c.Only chartered accountants work solely with taxes.

d.Accountants can focus on various aspects of accounting, such as management accounting, financial statements, and internal controls, and may not know much about taxes.

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Suppose a company has $200 in fixed costs and $40 per unit in variable costs. The company sold 10 items for a total of $1,000. How much of a net profit or loss did this sale produce?

Select one:

a.The sale produced a net loss of $200.

b.The sale produced a net profit of $400.

c.The sale produced a net profit of $800.

d.The sale produced a net loss of $100.

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What is a limitation of ratios?

Select one:

a.Communication of complex financial matters

b.Easier evaluation of a company

c.Accounting information

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Which of the following is an example of an operating activity, as related to the cash flow statement?

Select one:

a.Payments of loans

b.Payments to suppliers

c.Payments of cash dividends

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Which of the following are examples of long-term liabilities? (Select all that apply.)

Select one or more:

a.A company issues bonds due in 10 years.

b.A company gives clients 3 months to pay their bills.

c.A company receives a 1-month extension to pay its bills.

d.A company obtains a loan from the bank that is due in full in 3 years.