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Exam 17: Understanding Accounting and Financial Information

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Question 171

Multiple Choice

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One of the key financial statements prepared in the fifth step of the accounting cycle is:

A) general journal.
B) statement of cash flows.
C) asset summary.
D) social audit.

E) A) and B)
F) All of the above

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Question 172

Multiple Choice

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Debts that are due in one year or less are classified on the Balance Sheet as:

A) Current liabilities.
B) Bonds payable.
C) Callable bonds.
D) Immediate expenses.

E) A) and D)
F) None of the above

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Question 173

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Derek has a bachelor's degree in accounting and additional training in tax law.He is responsible for preparing tax returns and developing tax strategies for his employer,and has done so for the past seven years.Derek is a certified government accountant.

An accountant who has a bachelor's degree,two years of experience in internal auditing and who has passed an exam by the Institute of Internal Auditors can become recognized as a certified internal auditor.

The LIFO method of inventory valuation bases the cost of goods sold on the cost of:

The _______ ratio helps determine the ability of a firm to repay its short-term debts even if it has difficulty selling its inventory.

Which of the following is an example of a financial transaction?

Activities of managerial accountants include measuring and reporting the costs of production,marketing and other functions within the organization.

Identify the three key financial statements that corporations are required to prepare,and describe the type of information found on each.

If a firm can reduce its cost of goods sold and continue to sell its product for the same price,we would expect the firm to enjoy an increase in its:

FIFO is a method of inventory valuation that assumes the items most recently purchased are also the items that are sold first.

Patents and copyrights are classified as ___________ on the Balance Sheet.

The Sarbanes-Oxley Act strengthens the protection for whistleblowers who report wrongful actions of company officers.

The work of a certified management accountant is intended to enable people outside of the organization to make investment decisions.

The Barkley Company will refer to its income statements to determine whether it was profitable,or,whether it lost money over the past year.

A balance sheet is composed of assets,liabilities,and revenues.

Which of the following is a key step in the accounting cycle?

The fundamental accounting equation is as follows: Assets = Liabilities + Owners' equity.

The __________ is an accounting statement that reports the financial condition of a firm at a specific point in time.

Hap owns and operates a small business with only four full-time employees and less than $500,000 in annual sales.He currently uses a manual accounting system and relies on a part-time bookkeeper to keep his records in order.In evaluating the possible adoption of a computerized accounting system,Hap will probably discover that: