Question 1

Jack Stanley graduated from college and obtained a full-time job in accounting.At the end of his first year of employment, his assets totaled $9,000.His liabilities totaled $3,000.His ____ was $6,000.

Accepted Answer

A)   asset total
B)   profit
C)   net worth
D)   cost of living
E)   allocated totalF) C) and D)
G) A) and E)

Question 2

What types of accounts might be listed on a firm's income statement? What would be the term for the dollar amount left at the bottom of the income statement?

Accepted Answer

On a firm's income statement, various ty...

Question 3

Victor Cooper spent five years in an accounting educational program and completed a rigorous accounting examination five years ago.Since then, he has worked for several accounting firms.Currently he is a senior partner in a huge international accounting firm.By profession, Victor is probably a_____.

Accepted Answer

A)   bookkeeper
B)   certified public accountant
C)   marketing manager
D)   vice president of finance
E)   private accountantF) A) and D)
G) None of the above

Question 4

In what ways does the Sarbanes-Oxley Act improve the validity of the information provided by a firm's accounting system?

Accepted Answer

The Sarbanes-Oxley Act improves the vali...

Question 5

The term ____ describes assets that can be quickly converted into cash or consumed in one year or less.

Accepted Answer

A)   expenses
B)   overhead costs
C)   current assets
D)   acid-test assets
E)   fixed assetsF) C) and D)
G) A) and B)

Question 6

Which of the following statements about the Sarbanes-Oxley Act is incorrect?

Accepted Answer

A)   The act was passed in 1996.
B)   Because the act is complex, compliance is more expensive and time consuming for corporate management.
C)   Because of the act, the SEC was required to establish a federal oversight board.
D)   Because of the act, a corporation's chief executive and financial officers must certify financial reports.
E)   The act strengthened the penalty for destroying financial documents related to an audit.F) D) and E)
G) A) and D)

Question 7

Wallace Plumbing Company had income from operations of $110,000.It paid federal income taxes of $26,000.What was the firm's net income after taxes?

Accepted Answer

A)   $144,000
B)   $98,000
C)   $84,000
D)   $22,000
E)   $12,000F) B) and C)
G) B) and E)

Question 8

The total dollar amount of all goods and services sold during the accounting period is called net sales.

Accepted Answer

A) True 
 B)False

Question 9

Schluster Hardware, Inc., had a gross profit of $380,000, operating expenses of $210,000, and income taxes of $48,000.What is Schluster's net income after taxes?

Accepted Answer

A)   $122,000
B)   $80,000
C)   $208,000
D)   $170,000
E)   $332,000F) B) and E)
G) C) and D)

Question 10

The primary users of accounting information are managers.What other groups outside the organization may use accounting information about a firm?

Accepted Answer

Accounting information is not only cruci...

Question 11

According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000.Which of the following statements is correct?

Accepted Answer

A)   The owners' equity is $155,000.
B)   The owners' equity is $93,000.
C)   The firm's current assets are $62,000.
D)   The firm's current liabilities are $24,000.
E)   The firm's accounting equation won't balance.F) A) and E)
G) A) and B)

Question 12

Patents and copyrights confer value on a firm but do not exist physically.Thus, they are identified as_____.

Accepted Answer

A)   current assets
B)   prepaid expenses
C)   fixed assets
D)   intangible assets
E)   owners' equityF) A) and C)
G) A) and D)

Question 13

The financial ratio obtained by dividing net income after taxes by owners' equity is called the _____.

Accepted Answer

A)   earnings per share
B)   return on sales
C)   acid-test ratio
D)   working capital
E)   return on owners' equityF) All of the above
G) A) and E)

Question 14

A public corporation must change its lead auditing firm

Accepted Answer

A)   every year.
B)   every two years.
C)   every five years.
D)   every ten years.
E)   whenever it wants to.F) A) and D)
G) A) and B)

Question 15

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank.This debt owed to the bank is a(n)  _____.

Accepted Answer

A)   liability
B)   expense
C)   owners' equity
D)   asset
E)   creditF) B) and C)
G) B) and E)

Question 16

The Cheese Shoppe's liabilities total $59,000 and its owners' equity is $124,000.Which of the following is true?

Accepted Answer

A)   The total assets equal $65,000.
B)   The firm's assets are $124,000.
C)   The current liabilities are less than the current assets.
D)   The total assets equal $183,000.
E)   The firm's sales are $183,000.F) B) and C)
G) C) and D)

Question 17

Write the accounting equation.Then define each term and give an example.

Accepted Answer

The accounting equation is Assets = Liab...

Question 18

Kim's Copy Shop is in the process of organizing its assets in the appropriate order.They ask you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable.You list ____ first and ____ last.

Accepted Answer

A)   merchandise inventory; notes receivable
B)   accounts receivable; equipment
C)   notes receivable; accounts receivable
D)   equipment; accounts receivable
E)   cash; equipmentF) B) and D)
G) D) and E)

Question 19

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Accepted Answer

A) True 
 B)False

Question 20

Managers often compare financial and accounting data for previous accounting periods and for competing firms.

Accepted Answer

A) True 
 B)False

Exam 15: Using Accounting Information

Schluster Hardware, Inc., had a gross profit of $380,000, operating expenses of $210,000, and income taxes of $48,000.What is Schluster's net income after taxes?

Correct AnswerverifiedShow Answer

The total dollar amount of all goods and services sold during the accounting period is called net sales.

Correct AnswerverifiedShow Answer

The financial ratio obtained by dividing net income after taxes by owners' equity is called the _____.

Correct AnswerverifiedShow Answer

Which of the following statements about the Sarbanes-Oxley Act is incorrect?

Correct AnswerverifiedShow Answer

Jack Stanley graduated from college and obtained a full-time job in accounting.At the end of his first year of employment, his assets totaled $9,000.His liabilities totaled $3,000.His ____ was $6,000.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Patents and copyrights confer value on a firm but do not exist physically.Thus, they are identified as_____.

Correct AnswerverifiedShow Answer

Write the accounting equation.Then define each term and give an example.

Correct AnswerAnswered by ExamLex AIThe accounting equation is Assets = Liab...View AnswerShow Answer

According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank.This debt owed to the bank is a(n) _____.

Correct AnswerverifiedShow Answer

Kim's Copy Shop is in the process of organizing its assets in the appropriate order.They ask you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable.You list ____ first and ____ last.

Correct AnswerverifiedShow Answer

A public corporation must change its lead auditing firm

Correct AnswerverifiedShow Answer

The term ____ describes assets that can be quickly converted into cash or consumed in one year or less.

Correct AnswerverifiedShow Answer

In what ways does the Sarbanes-Oxley Act improve the validity of the information provided by a firm's accounting system?

Correct AnswerAnswered by ExamLex AIThe Sarbanes-Oxley Act improves the vali...View AnswerShow Answer

Wallace Plumbing Company had income from operations of $110,000.It paid federal income taxes of $26,000.What was the firm's net income after taxes?

Correct AnswerverifiedShow Answer

What types of accounts might be listed on a firm's income statement? What would be the term for the dollar amount left at the bottom of the income statement?

Correct AnswerAnswered by ExamLex AIOn a firm's income statement, various ty...View AnswerShow Answer

The primary users of accounting information are managers.What other groups outside the organization may use accounting information about a firm?

Correct AnswerAnswered by ExamLex AIAccounting information is not only cruci...View AnswerShow Answer

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Correct AnswerverifiedShow Answer

Managers often compare financial and accounting data for previous accounting periods and for competing firms.

Correct AnswerverifiedShow Answer

The Cheese Shoppe's liabilities total $59,000 and its owners' equity is $124,000.Which of the following is true?

Correct AnswerverifiedShow Answer

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Correct Answer
Answered by ExamLex AI
The accounting equation is Assets = Liab...
View Answer

Correct Answer
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Correct Answer
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Kim's Copy Shop is in the process of organizing its assets in the appropriate order.They ask you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable.You list first and last.

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The Sarbanes-Oxley Act improves the vali...
View Answer

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
On a firm's income statement, various ty...
View Answer

Correct Answer
Answered by ExamLex AI
Accounting information is not only cruci...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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