Exam 15: The Role of Accountants and Accounting Information

A) hiding expenses
B) underreporting liabilities
C) overestimating depreciation value of equipment
D) inflating revenues
E) maximizing the value of a company's intangible assets

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A) the bakery's short-term solvency ratio
B) the bakery's long-term solvency ratio
C) the bakery's profitability ratio
D) the bakery's activity ratio
E) the bakery's equity ratio

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A) full disclosure
B) revenue recognition
C) compliance
D) ethical practice
E) materiality

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A) $2 million
B) $3 million
C) $5 million
D) $7 million
E) $8 million

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D

A) Is it a good time for the business to grow?
B) Can the company survive a season of low revenues?
C) Does the company have too many employees?
D) Can the company take on more debt?
E) What is the value of the company's assets?

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A) company-wide analysis
B) forensic accounting
C) portfolio analysis
D) audit
E) preliminary investigation

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D

A) Nowadays many companies burnish their balance sheet by claiming inflated figures for goodwill.
B) An income statement from one year may be radically different from the one for the previous year.
C) It can be difficult for auditors to independently verify certain figures in income statements.
D) The management by data trend has led companies to consider as imperative detailed and accurate financial statements.
E) In times of recession, companies often reduce their accounting and financial management staffs.

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A) national bookkeeping standards
B) core competencies for accounting
C) accounting and financial rules
D) national guidelines of accounting principles
E) generally accepted accounting principles

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A) Julie has said that she wants to work for one of the accounting services firms like Ernst & Young.
B) The demand for government accountants is expected to grow in the near future.
C) Two other recent grads in Julie's class chose to pursue public accounting.
D) A recent survey showed that about 45 percent of new accountants chose public accounting.
E) Julie has said that she wants to work as an in-house accountant for a large public interest group like Sierra Club or Greenpeace.

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A) managerial and forensic
B) financial and managerial
C) bookkeeping and advisory
D) corporate and individual
E) public and private

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A) Can the company pay its immediate debts without obtaining further loans?
B) Does the company have enough inventory to meet sales demands?
C) How much inventory on hand does Santos have?
D) How much bonds payable debt is Santos carrying?
E) Is the company selling products at an appropriate price?

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A

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A) the amount of equity within each type of asset-current versus fixed and intangible
B) the financial form of the equity-cash investments versus stock and bond investments
C) the source of the equity-investments versus earnings
D) the use of the equity-invested versus saved
E) the age of the equity-older investments and earnings versus newer investments and earnings

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A) income statement
B) statement of cash flows
C) balance sheet
D) expense report
E) annual budget

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A) operating costs and profits, investing costs and profits, and financing costs and profits
B) current revenue, long-term revenue, and net revenue
C) revenue, sales, and income
D) assets, liabilities, and owners' equity
E) revenues, cost of revenues, operating expenses, and net income

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