Accounting for decision makers C213
The impact a business's activities have on its overall financial performance - CORRECT
ANSWER-What does accounting focus on?
Statement of cash flows - CORRECT ANSWER-Which report summarizes cash
collections and cash expenditures from operating, investing, and financing activities
over a period of time?
Employees - CORRECT ANSWER-Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - CORRECT ANSWER-Which
benefit does a corporation gain by following Generally Accepted Accounting Principles
(GAPP)?
The Public Company Accounting Oversight Board (PACOB) - CORRECT
ANSWER-Which body regulates a certified public accounting firm's audit practices when
the firm is auditing a large publicly traded company?
Information technology - CORRECT ANSWER-What has had the most significant
impact on Accounting practices?
Ownership and Debt - CORRECT ANSWER-What two items of information are revealed
on the balance sheet?
Owners equity - CORRECT ANSWER-Which term is defined as the residual in the net
assets of a company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - CORRECT ANSWER-Which situation should result in revenue
recognition on the income statement for the year ending 12/31/14 if the firm is using
accrual accounting?
Cash from financing activities - CORRECT ANSWER-Which category on the statement
of cash flows summarizes cash receipts and payments to owners and creditors of the
company?
,In the notes to financial statements - CORRECT ANSWER-Where would an investor
find a summary of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position - CORRECT
ANSWER-Which assurance does an external audit report provide for its readers?
Reliable - CORRECT ANSWER-Information that can be verified
Relevant - CORRECT ANSWER-Information having to do with the matter at hand
Material - CORRECT ANSWER-Information that is important enough to make a
difference
Conservatism - CORRECT ANSWER-Information related to recognizing losses as they
occur
Continual decrease in sales - CORRECT ANSWER-What is consistent with a continual
decline in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - CORRECT ANSWER-Which form of
debt should be reported in the long-term liability category?
Operating expenses &
Ordinary gains and losses - CORRECT ANSWER-Which values affect the
measurement of net income?
Gross profit &
Income from operations - CORRECT ANSWER-Which items' subtotals are included in a
multi-step income statement?
Cash from investing activities - CORRECT ANSWER-What is a common category in a
statement of cash flows?
Cash from financing activities - CORRECT ANSWER-Which cash flow category would
include "cash received from investors"?
Cash payments for purchase of plant assets - CORRECT ANSWER-Which item is an
investing activity?
, Increase in cash from investing activities - CORRECT ANSWER-What impact does the
sale of equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies - CORRECT
ANSWER-What is known about the direct and indirect methods of preparing statements
of cash flow?
The inventory department counts and inspects items as received and forwards the
receiving record to accounts payable. - CORRECT ANSWER-Which internal control is
intended to ensure that a company does not mistakenly pay a supplier for an invoice
that includes more items than were actually received?
Pressure to meet internal sales goals &
Preparing to qualify for a bank loan - CORRECT ANSWER-What are common reasons
for managers to manipulate reported earnings?
Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or
other company management. - CORRECT ANSWER-Which requirements must
accounting firms that audit public companies meet under the Sarbanes-Oxley Act?
They search for and investigate fraud.
&
They review financial records and internal controls. - CORRECT ANSWER-Which
actions do internal auditors perform to assist in maintaining the integrity of financial
statements?
They ensure that financial statement users are provided with reliable information to use
in decision making - CORRECT ANSWER-What is a significant role of the U.S.
Securities and Exchange Commission (SEC) in financial reporting?
A better insight for management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions - CORRECT ANSWER-What does management accounting
provide?
The impact a business's activities have on its overall financial performance - CORRECT
ANSWER-What does accounting focus on?
Statement of cash flows - CORRECT ANSWER-Which report summarizes cash
collections and cash expenditures from operating, investing, and financing activities
over a period of time?
Employees - CORRECT ANSWER-Which users would have a primary concern with an
organization's ability to provide healthcare benefits?
An increase in its compatibility to other companies - CORRECT ANSWER-Which
benefit does a corporation gain by following Generally Accepted Accounting Principles
(GAPP)?
The Public Company Accounting Oversight Board (PACOB) - CORRECT
ANSWER-Which body regulates a certified public accounting firm's audit practices when
the firm is auditing a large publicly traded company?
Information technology - CORRECT ANSWER-What has had the most significant
impact on Accounting practices?
Ownership and Debt - CORRECT ANSWER-What two items of information are revealed
on the balance sheet?
Owners equity - CORRECT ANSWER-Which term is defined as the residual in the net
assets of a company?
In 2014, a company provides services to a customer for which cash will be collected the
next year (2015). - CORRECT ANSWER-Which situation should result in revenue
recognition on the income statement for the year ending 12/31/14 if the firm is using
accrual accounting?
Cash from financing activities - CORRECT ANSWER-Which category on the statement
of cash flows summarizes cash receipts and payments to owners and creditors of the
company?
,In the notes to financial statements - CORRECT ANSWER-Where would an investor
find a summary of a company's significant accounting policies?
The company's financial statements fairly reflect its financial position - CORRECT
ANSWER-Which assurance does an external audit report provide for its readers?
Reliable - CORRECT ANSWER-Information that can be verified
Relevant - CORRECT ANSWER-Information having to do with the matter at hand
Material - CORRECT ANSWER-Information that is important enough to make a
difference
Conservatism - CORRECT ANSWER-Information related to recognizing losses as they
occur
Continual decrease in sales - CORRECT ANSWER-What is consistent with a continual
decline in gross profit if the firm's cost of goods sold remains the same?
Notes payable expected to be paid in 18 months - CORRECT ANSWER-Which form of
debt should be reported in the long-term liability category?
Operating expenses &
Ordinary gains and losses - CORRECT ANSWER-Which values affect the
measurement of net income?
Gross profit &
Income from operations - CORRECT ANSWER-Which items' subtotals are included in a
multi-step income statement?
Cash from investing activities - CORRECT ANSWER-What is a common category in a
statement of cash flows?
Cash from financing activities - CORRECT ANSWER-Which cash flow category would
include "cash received from investors"?
Cash payments for purchase of plant assets - CORRECT ANSWER-Which item is an
investing activity?
, Increase in cash from investing activities - CORRECT ANSWER-What impact does the
sale of equipment have on the statement of cash flows?
The indirect method is more popular among large U.S. companies - CORRECT
ANSWER-What is known about the direct and indirect methods of preparing statements
of cash flow?
The inventory department counts and inspects items as received and forwards the
receiving record to accounts payable. - CORRECT ANSWER-Which internal control is
intended to ensure that a company does not mistakenly pay a supplier for an invoice
that includes more items than were actually received?
Pressure to meet internal sales goals &
Preparing to qualify for a bank loan - CORRECT ANSWER-What are common reasons
for managers to manipulate reported earnings?
Firms must not provide certain non-audit services to audit clients, such as management
functions or legal services. &
Firms must report to and be retained by the audit committee rather than the CFO or
other company management. - CORRECT ANSWER-Which requirements must
accounting firms that audit public companies meet under the Sarbanes-Oxley Act?
They search for and investigate fraud.
&
They review financial records and internal controls. - CORRECT ANSWER-Which
actions do internal auditors perform to assist in maintaining the integrity of financial
statements?
They ensure that financial statement users are provided with reliable information to use
in decision making - CORRECT ANSWER-What is a significant role of the U.S.
Securities and Exchange Commission (SEC) in financial reporting?
A better insight for management so a business can perform more effectively
&
A competitive edge to a business by providing its managers with the detailed data
needed to make decisions - CORRECT ANSWER-What does management accounting
provide?
