Question 1

The accounting cycle is a six-step procedure that results in the preparation and analysis of major financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Over the past month,Monica noted that she disbursed $6,347 in payments for operations in her travel agency and received $6,189 in cash receipts for services rendered.She had no cash receipts or disbursements from investments or financing activities.Thus Monica had a:

Accepted Answer

A)  negative cash flow.
B)  bad debt allowance.
C)  tax credit payment.
D)  positive disbursement.

Question 3

Rent,salaries,insurance,and amortization are all examples of the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

In addition to the mechanical tasks of recording and classifying accounting information,the best accounting software programs currently available for small businesses have the ability to make financial decisions,thus eliminating the need for owners of small businesses to consult with accountants.

Accepted Answer

A) True 
 B)False

Question 6

Liabilities are reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 7

The individuals in a firm that are responsible for the development of strategies to minimize taxes are called:

Accepted Answer

A)  certified public accountants.
B)  certified management accountants.
C)  tax accountants.
D)  certified internal auditors.

Question 8

Accounting information is not relevant for non-profit organizations.

Accepted Answer

A) True 
 B)False

Question 9

The accounting statement that reports cash receipts and disbursements for a business is called the:

Accepted Answer

A)  balance sheet.
B)  income statement.
C)  cash flow statement.
D)  cash basis trial balance.

Question 10

McCartney Consulting Group is a management-consulting firm that provides its expertise to businesses that employ its services.Since it does not hold an inventory of goods or produce any goods itself:

Accepted Answer

A)  its balance sheet will not record any current assets.
B)  its revenue will equal its net income.
C)  it is unlikely to have any operating expenses.
D)  its gross profit could be identical to its net revenue.

Question 11

Rent,amortization,and salaries are all examples of:

Accepted Answer

A)  expenses.
B)  owners' equity.
C)  liabilities.
D)  assets.

Question 12

refers to how fast an asset could be converted into cash.

Accepted Answer

A)  Fundability
B)  Liquidity
C)  Accessibility
D)  Velocity

Question 13

To find out details of the maintenance costs,within the accounting system,you should refer to the ledger.

Accepted Answer

A) True 
 B)False

Question 14

Jill wants to start her own business,but knows little about how to set up an accounting system or interpret financial information."I'm not worried about accounting," she tells her friends."I'll just hire a part-time bookkeeper to handle all that type of stuff,and focus my attention on what I like-finding ways to satisfy my customers." Which of the following is the best response to Jill's comments?

Accepted Answer

A)  Jill has a good plan.Only managers of large firms require knowledge of accounting.Owners and managers of small businesses can easily get away with just a part-time bookkeeper.
B)  Although Jill can hire someone for bookkeeping,she'll still need to know how to read,understand,and interpret basic accounting reports in order to make good business decisions.
C)  Jill should make sure the bookkeeper she hires knows how to use a database,since this type of software is the heart of any efficient accounting system.
D)  Most entrepreneurs would agree with Jill's opinion.The work done by accountants is mainly clerical in nature,so time spent by business owners on accounting tends to take them away from more important tasks.

Question 15

Assets are reported on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

How many professional accounting designations does Canada have?

Accepted Answer

A)  One
B)  Two
C)  Three
D)  Four

Question 18

Financial accounting involves activities such as preparing budgets and measuring production costs.

Accepted Answer

A) True 
 B)False

Question 19

A balance sheet lists assets in order of their _______.

Accepted Answer

A)  income generating ability
B)  dollar value,from smallest to largest
C)  date of acquisition,with the most recently acquired assets listed first
D)  liquidity,with the most liquid assets listed first

Question 20

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Accepted Answer

A) True 
 B)False

Exam 16: Understanding Accounting and Financial Information

In addition to the mechanical tasks of recording and classifying accounting information,the best accounting software programs currently available for small businesses have the ability to make financial decisions,thus eliminating the need for owners of small businesses to consult with accountants.

Correct Answer
verified

Rent,salaries,insurance,and amortization are all examples of the cost of goods sold.

Correct Answer
verified

Accounting information is not relevant for non-profit organizations.

Correct Answer
verified

How many professional accounting designations does Canada have?

Correct Answer
verified

refers to how fast an asset could be converted into cash.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Correct Answer
verified

The accounting cycle is a six-step procedure that results in the preparation and analysis of major financial statements.

Correct Answer
verified

Over the past month,Monica noted that she disbursed $6,347 in payments for operations in her travel agency and received $6,189 in cash receipts for services rendered.She had no cash receipts or disbursements from investments or financing activities.Thus Monica had a:

Correct Answer
verified

The individuals in a firm that are responsible for the development of strategies to minimize taxes are called:

Correct Answer
verified

Liabilities are reported on the income statement.

Correct Answer
verified

Rent,amortization,and salaries are all examples of:

Correct Answer
verified

The accounting statement that reports cash receipts and disbursements for a business is called the:

Correct Answer
verified

A balance sheet lists assets in order of their _______.

Correct Answer
verified

Financial accounting involves activities such as preparing budgets and measuring production costs.

Correct Answer
verified

McCartney Consulting Group is a management-consulting firm that provides its expertise to businesses that employ its services.Since it does not hold an inventory of goods or produce any goods itself:

Correct Answer
verified

To find out details of the maintenance costs,within the accounting system,you should refer to the ledger.

Correct Answer
verified

Assets are reported on the balance sheet.

Correct Answer
verified

Exam 16: Understanding Accounting and Financial Information

In addition to the mechanical tasks of recording and classifying accounting information,the best accounting software programs currently available for small businesses have the ability to make financial decisions,thus eliminating the need for owners of small businesses to consult with accountants.

Correct AnswerverifiedShow Answer

Rent,salaries,insurance,and amortization are all examples of the cost of goods sold.

Correct AnswerverifiedShow Answer

Accounting information is not relevant for non-profit organizations.

Correct AnswerverifiedShow Answer

How many professional accounting designations does Canada have?

Correct AnswerverifiedShow Answer

refers to how fast an asset could be converted into cash.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Correct AnswerverifiedShow Answer

The accounting cycle is a six-step procedure that results in the preparation and analysis of major financial statements.

Correct AnswerverifiedShow Answer

Over the past month,Monica noted that she disbursed $6,347 in payments for operations in her travel agency and received $6,189 in cash receipts for services rendered.She had no cash receipts or disbursements from investments or financing activities.Thus Monica had a:

Correct AnswerverifiedShow Answer

The individuals in a firm that are responsible for the development of strategies to minimize taxes are called:

Correct AnswerverifiedShow Answer

Liabilities are reported on the income statement.

Correct AnswerverifiedShow Answer

Rent,amortization,and salaries are all examples of:

Correct AnswerverifiedShow Answer

The accounting statement that reports cash receipts and disbursements for a business is called the:

Correct AnswerverifiedShow Answer

A balance sheet lists assets in order of their _______.

Correct AnswerverifiedShow Answer

Financial accounting involves activities such as preparing budgets and measuring production costs.

Correct AnswerverifiedShow Answer

McCartney Consulting Group is a management-consulting firm that provides its expertise to businesses that employ its services.Since it does not hold an inventory of goods or produce any goods itself:

Correct AnswerverifiedShow Answer

To find out details of the maintenance costs,within the accounting system,you should refer to the ledger.

Correct AnswerverifiedShow Answer

Assets are reported on the balance sheet.

Correct AnswerverifiedShow Answer

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verified

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