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Exam 17: Understanding Accounting and Financial Information

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Question 41

Multiple Choice

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Valeria, owner of Coolest Closet, has applied for a business loan. Her prospective banker has requested information concerning the financial condition of her business. Which accounting discipline is responsible for providing accounting information to outside stakeholders?

A) management accounting
B) financial accounting
C) tax accounting
D) certified bookkeeping

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Question 42

Multiple Choice

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Stockholders of Marshall Manufacturing are concerned about irregularities in the firm's accounting system. One approach to identify problems in the records of the company would be to have a(n) ________ performed.

A) internal audit
B) independent audit
C) unofficial audit
D) GAAP analysis

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Question 43

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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.

Financial accounting and managerial accounting are similar in that they both provide information intended primarily for people inside the organization.

Fairlawn Partners Consulting is a management-consulting firm that provides its expertise to businesses that employ its services. Since it does not hold an inventory of goods or produce any goods itself

Financial accounting involves activities such as preparing budgets and measuring production costs.

Bailey is concerned because during the past four months her company has experienced difficulty in paying its bills on time. She knows if this continues, the firm will have difficulties in accomplishing its goals. What is Bailey concerned with?

A firm's basic earnings per share measures how much profit was earned for each dollar invested by the firm's owners.

Accountants record, classify, and ________ the results of the financial information they gather.

Ronnecker Construction has several trucks that are used in the business. Recently, the owners were told that even though the government permits the firm to depreciate the vehicles, it is not a deductible expense on the income statement.

Marissa is taking her first course in accounting this semester. One of the first things she learns is that revenue and net income mean the same thing.

At present, accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Accounting software has proven to be especially helpful for small-business owners.

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

A(n) ________ provides accounting services to individuals or firms on a fee basis.

Which of the following ratios is a liquidity ratio?

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

FIFO and LIFO are two common

An accountant who works for a single business or government agency is referred to as a

Debts owed by a business are called