Question 1

A forensic accountant:

Accepted Answer

A)  investigates crime scenes.
B)  works for a public corporation.
C)  analyzes financial documents in search of fraudulent entries or financial misconduct.
D)  analyzes annual reports to ensure that corporations have adequate corporate governance mechanisms.
E)  investigates workplace accidents to determine fault.F) All of the above
G) B) and D)

Question 2

A company's assets that are used or converted into cash within the course of a calendar year are called:

Accepted Answer

A)  fixed assets.
B)  long-term assets.
C)  equity.
D)  current assets.
E)  current liabilities.F) None of the above
G) C) and D)

Question 3

Nina,a manager at a small restaurant,is engaged in conducting the accounting cycle.She begins by examining checks,credit card receipts,sales slips,and other related evidence concerning specific transactions.Which of the following steps should she follow immediately after this step?

Accepted Answer

A)  The annual reports must be prepared.
B)  The financial transactions must be recorded in a journal.
C)  The information from the journal must be transferred to a ledger.
D)  The hired Certified Public Accountant must attest that generally accepted accounting principles were used.
E)  The information from the trial balance should be used to prepare the financial statements.F) C) and E)
G) B) and E)

Question 4

Clara's Label owes certain debts to the Small Business Administration and her suppliers.In accounting,these debts are known as _____.

Accepted Answer

A)  owners' equity
B)  assets
C)  liabilities
D)  stock
E)  bondsF) C) and D)
G) A) and E)

Question 5

The _____,an evaluation of liquidity,measures how well an organization can meet its current obligations without resorting to the sale of its inventory.

Accepted Answer

A)  debt utilization ratio
B)  quick ratio
C)  asset utilization ratio
D)  receivables turnover ratio
E)  current ratioF) C) and D)
G) A) and E)

Question 6

An income statement shows:

Accepted Answer

A)  assets,liabilities,and equity.
B)  an organization's profitability over a period of time.
C)  the company's variable costs at a particular point in time.
D)  how much income each employee earned.
E)  how much income the CEO earns per year.F) A) and D)
G) All of the above

Question 7

_____ is the movement of money through an organization over a daily,weekly,monthly,or yearly basis.

Accepted Answer

A)  Expenses trajectory
B)  Income trajectory
C)  Assets flow
D)  Liabilities
E)  Cash flowF) A) and B)
G) A) and C)

Question 8

Potential investors typically study the _____ in a firm's annual report to determine whether the company meets their investment requirements.

Accepted Answer

A)  product list
B)  growth plans
C)  mission statement
D)  corporate information
E)  financial statementsF) A) and B)
G) All of the above

Question 9

_____,a category of cash flow,is calculated by combining the changes in the revenue accounts,expense accounts,current asset accounts,and current liability accounts.

Accepted Answer

A)  Cash from profiteering activities
B)  Cash from bookkeeping activities
C)  Cash from financing activities
D)  Cash from operating activities
E)  Cash from marketing activitiesF) C) and D)
G) B) and C)

Question 10

The terms accounting and bookkeeping are interchangeable.

Accepted Answer

A) True 
 B)False

Question 11

The _____,an asset utilization ratio,indicates how many times a firm collects its accounts receivable in one year.

Accepted Answer

A)  inventory turnover
B)  return on equity
C)  accounts payable
D)  receivables turnover
E)  asset turnoverF) A) and D)
G) B) and C)

Question 12

_____ shows how much income is generated by each $1 the owners have invested in a firm.

Accepted Answer

A)  Total asset turnover
B)  Profit margin
C)  Return on equity
D)  Return on assets
E)  Receivables turnoverF) A) and D)
G) None of the above

Question 13

The financial document that presents a "snapshot" of an organization's financial position at a given moment is called a(n) :

Accepted Answer

A)  income statement.
B)  balance sheet.
C)  annual report.
D)  budget.
E)  statement of cash flow.F) B) and E)
G) C) and D)

Question 14

A long-term lender,when lending money is more interested in a company's _____ and indebtedness to other lenders.

Accepted Answer

A)  operating revenues
B)  interest rates
C)  profitability
D)  mission statement
E)  vision statementF) A) and B)
G) A) and C)

Question 15

If a company is relying on borrowing and credit too extensively,this will probably be reflected in the _____.

Accepted Answer

A)  current usage ratio
B)  past utilization ratio
C)  debt utilization ratio
D)  liquid utilization ratio
E)  fixed asset usage ratioF) B) and E)
G) A) and B)

Question 16

A short-term lender examines a firm's _____ to assess its ability to repay a loan quickly with cash generated from sales.

Accepted Answer

A)  indebtedness
B)  profitability
C)  cash flow
D)  assets
E)  cash equityF) A) and B)
G) A) and C)

Question 17

The _____ is an accumulation of all financial transactions conducted by an organization since its founding.

Accepted Answer

A)  statement of retained earnings
B)  balance sheet
C)  profit and loss statement
D)  statement of cash flow
E)  income tax formF) C) and E)
G) B) and E)

Question 18

The balance sheet indicates what an organization owns or controls.

Accepted Answer

A) True 
 B)False

Question 19

What is the last step that must be taken before a firm's books can be closed for an accounting cycle?

Accepted Answer

A)  The annual reports must be prepared.
B)  The journal must be filled out.
C)  The information from the journal must be transferred to the ledger.
D)  A certified public accountant must attest that generally accepted accounting principles were used.
E)  The trial balance must be verified.F) All of the above
G) A) and C)

Question 20

In the context of expense accounts,salaries of executives and their staff are included under the category of:

Accepted Answer

A)  interest expenses.
B)  retained expenses.
C)  general and administrative expenses.
D)  research and development expenses.
E)  depreciation expenses.F) A) and B)
G) A) and C)

Exam 14: Accounting and Financial Statements

_____ is the movement of money through an organization over a daily,weekly,monthly,or yearly basis.

Correct AnswerverifiedShow Answer

Nina,a manager at a small restaurant,is engaged in conducting the accounting cycle.She begins by examining checks,credit card receipts,sales slips,and other related evidence concerning specific transactions.Which of the following steps should she follow immediately after this step?

Correct AnswerverifiedShow Answer

Clara's Label owes certain debts to the Small Business Administration and her suppliers.In accounting,these debts are known as _____.

Correct AnswerverifiedShow Answer

The _____ is an accumulation of all financial transactions conducted by an organization since its founding.

Correct AnswerverifiedShow Answer

A short-term lender examines a firm's _____ to assess its ability to repay a loan quickly with cash generated from sales.

Correct AnswerverifiedShow Answer

In the context of expense accounts,salaries of executives and their staff are included under the category of:

Correct AnswerverifiedShow Answer

If a company is relying on borrowing and credit too extensively,this will probably be reflected in the _____.

Correct AnswerverifiedShow Answer

_____ shows how much income is generated by each $1 the owners have invested in a firm.

Correct AnswerverifiedShow Answer

The balance sheet indicates what an organization owns or controls.

Correct AnswerverifiedShow Answer

The financial document that presents a "snapshot" of an organization's financial position at a given moment is called a(n) :

Correct AnswerverifiedShow Answer

A company's assets that are used or converted into cash within the course of a calendar year are called:

Correct AnswerverifiedShow Answer

A long-term lender,when lending money is more interested in a company's _____ and indebtedness to other lenders.

Correct AnswerverifiedShow Answer

The _____,an asset utilization ratio,indicates how many times a firm collects its accounts receivable in one year.

Correct AnswerverifiedShow Answer

An income statement shows:

Correct AnswerverifiedShow Answer

The _____,an evaluation of liquidity,measures how well an organization can meet its current obligations without resorting to the sale of its inventory.

Correct AnswerverifiedShow Answer

A forensic accountant:

Correct AnswerverifiedShow Answer

Potential investors typically study the _____ in a firm's annual report to determine whether the company meets their investment requirements.

Correct AnswerverifiedShow Answer

The terms accounting and bookkeeping are interchangeable.

Correct AnswerverifiedShow Answer

_____,a category of cash flow,is calculated by combining the changes in the revenue accounts,expense accounts,current asset accounts,and current liability accounts.

Correct AnswerverifiedShow Answer

What is the last step that must be taken before a firm's books can be closed for an accounting cycle?

Correct AnswerverifiedShow Answer

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