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Exam 17: Understanding Accounting and Financial Information

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Question 51

True/False

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The two major classes of operating expenses are current expenses and long-term expenses.

A) True
B) False

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Question 52

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Tyler works as an accountant for a mid-sized retail store.He has just completed a trial balance that resulted in no unexpected problems.Tyler's next task is likely to be:

A) Conducting the full audit.
B) Preparing a tax return for the company.
C) Preparing the store's balance sheet and other major financial statements.
D) Presenting the trial balance to the company owners.

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

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Question 53

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Cash flow difficulties are unlikely for a firm that is profitable.

As a certified public accountant (CPA),Kay might become involved in helping clients select appropriate accounting computer software for their firm.

Important provisions of the Sarbanes-Oxley Act:

Government organizations such as the IRS and other government regulatory agencies are interested in a firm's accounting information in order to help the firm strategize about ways to cut costs in order to minimize net income before taxes.

Rents,salaries,utilities and insurance are examples of operating expenses.

Jasmine is categorizing journal entries in order to post to the _______.

__________ involves the review and evaluation of the records that are used to prepare the organization's financial statements.

Information contained in a firm's annual report largely represents work done by managerial accountants.

The fundamental accounting equation states: Assets = _________.

At this point in time,Bark Three Times Pet Store's balance sheet shows $100,000 in assets and $90,000 in liabilities.The company's accounting system will show the owners' equity as $190,000.

Jamal is an accountant employed full-time by The Barkley Company.Jamal is an example of a public accountant.

The key financial statements are the balance sheet,the income statement,and the statement of cash flows.

As a certified public accountant,you would be working in the area of managerial accounting.

Good decisions are based on good information.Organizations need accounting-to provide good financial information.

During periods of rising prices,firms that want to report more attractive profits would tend to favor the FIFO technique of inventory valuation.

Financial accounting is used to provide information and analysis managers within the organization can use to assist them in decision making.

The _____ shows the assets,liabilities,and owners' equity of a firm,at a specific point in time.

In an effort to maintain a competitive advantage,firms do not share accounting information with people outside of the firm.