Question 1

The _____ presents a snapshot of an organization's financial position at a given moment.

Accepted Answer

A)  profit margin
B)  statement of cash flows
C)  net income
D)  per share data
E)  balance sheet

Question 2

Non-business entities typically obtain revenue through:

Accepted Answer

A)  the sale of goods.
B)  the sale of services.
C)  the rental of property.
D)  investments.
E)  donations.

Question 3

Net income is:

Accepted Answer

A)  earnings after all expenses have been deducted.
B)  valuation of assets after all taxes are paid.
C)  liabilities after taxes.
D)  expenses after taxes.
E)  cash disbursements after taxes.

Question 4

Evelyn is a self-employed,state-certified accountant who provides the following accounting services - filing tax returns,preparing financial records,auditing corporate financial records.She is known as a:

Accepted Answer

A)  private accountant.
B)  certified management accountant.
C)  certified public accountant.
D)  noncertified accountant.
E)  forensic accountant.

Question 5

An equivalent term for net income in accounting terms is:

Accepted Answer

A)  gross income.
B)  gross profit.
C)  goods or services sold.
D)  profit after taxes.
E)  operating income.

Question 6

Double-entry bookkeeping is a system of recording and classifying business transactions:

Accepted Answer

A)  by the amount of the transaction.
B)  in separate accounts in order to balance the accounting equation.
C)  in all accounts including those that do not maintain the accounting equation.
D)  in general ledgers.
E)  in the same account.

Question 7

Return on assets and return on equity are examples of _____.

Accepted Answer

A)  asset utilization ratios
B)  liquidity ratios
C)  debt ratios
D)  profitability ratios
E)  current ratios

Question 8

Thomson is a manager at a bank.He has to decide whether to lend an amount of $10,000 to Safe Toy.He should:

Accepted Answer

A)  approve the loan application without checking the company's credibility.
B)  review the company's financial statements.
C)  prepare an organizational budget.
D)  report the organization's financial performance to outsiders.
E)  turn down the loan application.

Question 9

When a company wants to place a value on a physical asset for its balance sheet,it must:

Accepted Answer

A)  reduce the value by the amount the asset has depreciated.
B)  auction the asset off.
C)  ask its competitors what the asset is worth.
D)  price a new one.
E)  increase the value by the amount the asset has appreciated.

Question 10

Which of the following is a requirement stated by the Sarbanes-Oxley Act?

Accepted Answer

A)  This act requires that the Federal Reserve Board take up the task of certifying public accountants.
B)  This act requires firms to separate their consulting and auditing businesses.
C)  This act limits the types of assets commercial banks can buy.
D)  This act limits the use of derivative instruments.
E)  This act requires that firms employ their own private accountants.

Question 11

The _____,a debt utilization ratio,is a measure of the safety margin a company has with respect to the interest payments it must make to its creditors.

Accepted Answer

A)  liquidity ratio
B)  current ratio
C)  profitability ratio
D)  times interest earned ratio
E)  debt to total assets ratio

Question 12

Which of the following calculations helps managers compare an organization's productivity,profitability,and financing mix with other similar entities?

Accepted Answer

A)  Feedback analysis
B)  Ratio analysis
C)  Specific analysis
D)  General analysis

Question 13

The _____ limits the types of assets commercial banks can buy; the amount of capital they must maintain; and the use of derivative instruments such as options,futures,and structured investment products.

Accepted Answer

A)  Sarbanes-Oxley Act
B)  Dodd-Frank Act
C)  Glass-Steagall Act
D)  Gramm-Leach-Bliley Act
E)  Celler-Kefauver Act

Question 14

The _____ required firms to be more rigorous in their accounting and reporting practices.

Accepted Answer

A)  Sarbanes-Oxley Act
B)  Celler-Kefauver Act
C)  Williams Act
D)  Glass-Steagall Act
E)  Gram-Leach-Bliley Act

Question 15

Maurice was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its:

Accepted Answer

A)  current ratio.
B)  receivable turnover.
C)  inventory turnover.
D)  earnings per share.
E)  book value per share.

Exam 14: Accounting and Financial Statements

Double-entry bookkeeping is a system of recording and classifying business transactions:

Correct Answer
verified

The _____ required firms to be more rigorous in their accounting and reporting practices.

Correct Answer
verified

Thomson is a manager at a bank.He has to decide whether to lend an amount of $10,000 to Safe Toy.He should:

Correct Answer
verified

Evelyn is a self-employed,state-certified accountant who provides the following accounting services - filing tax returns,preparing financial records,auditing corporate financial records.She is known as a:

Correct Answer
verified

The _____ presents a snapshot of an organization's financial position at a given moment.

Correct Answer
verified

Maurice was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its:

Correct Answer
verified

Which of the following is a requirement stated by the Sarbanes-Oxley Act?

Correct Answer
verified

Which of the following calculations helps managers compare an organization's productivity,profitability,and financing mix with other similar entities?

Correct Answer
verified

Net income is:

Correct Answer
verified

The _____,a debt utilization ratio,is a measure of the safety margin a company has with respect to the interest payments it must make to its creditors.

Correct Answer
verified

Non-business entities typically obtain revenue through:

Correct Answer
verified

An equivalent term for net income in accounting terms is:

Correct Answer
verified

Return on assets and return on equity are examples of _____.

Correct Answer
verified

The _____ limits the types of assets commercial banks can buy; the amount of capital they must maintain; and the use of derivative instruments such as options,futures,and structured investment products.

Correct Answer
verified

When a company wants to place a value on a physical asset for its balance sheet,it must:

Correct Answer
verified

Exam 14: Accounting and Financial Statements

Double-entry bookkeeping is a system of recording and classifying business transactions:

Correct AnswerverifiedShow Answer

The _____ required firms to be more rigorous in their accounting and reporting practices.

Correct AnswerverifiedShow Answer

Thomson is a manager at a bank.He has to decide whether to lend an amount of $10,000 to Safe Toy.He should:

Correct AnswerverifiedShow Answer

Evelyn is a self-employed,state-certified accountant who provides the following accounting services - filing tax returns,preparing financial records,auditing corporate financial records.She is known as a:

Correct AnswerverifiedShow Answer

The _____ presents a snapshot of an organization's financial position at a given moment.

Correct AnswerverifiedShow Answer

Maurice was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its:

Correct AnswerverifiedShow Answer

Which of the following is a requirement stated by the Sarbanes-Oxley Act?

Correct AnswerverifiedShow Answer

Which of the following calculations helps managers compare an organization's productivity,profitability,and financing mix with other similar entities?

Correct AnswerverifiedShow Answer

Net income is:

Correct AnswerverifiedShow Answer

The _____,a debt utilization ratio,is a measure of the safety margin a company has with respect to the interest payments it must make to its creditors.

Correct AnswerverifiedShow Answer

Non-business entities typically obtain revenue through:

Correct AnswerverifiedShow Answer

An equivalent term for net income in accounting terms is:

Correct AnswerverifiedShow Answer

Return on assets and return on equity are examples of _____.

Correct AnswerverifiedShow Answer

The _____ limits the types of assets commercial banks can buy; the amount of capital they must maintain; and the use of derivative instruments such as options,futures,and structured investment products.

Correct AnswerverifiedShow Answer

When a company wants to place a value on a physical asset for its balance sheet,it must:

Correct AnswerverifiedShow Answer

Correct Answer
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