ACCOUNTING FOR DECISION MAKERS -
C213 Pre-Assessment Exam Questions and
Answers Already Graded A+ Latest 2025
Which of the following is NOT a reason for the integration of worldwide accounting
standards?
Correct Answer: the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices
Correct Answer: True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance.
Correct Answer: False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress
Correct Answer: Sarbanes-Oxley Act
Steps in the decision cycle from first (1) to last (5)
Correct Answer: Prepare financial statements
Analyze financial statements
,Gather information
Make decision
Implement decision
What is the price-earnings (PE) ratio for this company?
Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
Correct Answer: 11.0
What does it mean if a company has a debt ratio of 101.5%?
Correct Answer: The company has 1.5% more total liabilities than total assets.
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
remains the same?
Correct Answer: Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow?
Correct Answer: $6,991/$5,486 & $5,220/$1,875
,What two items of information are revealed on the balance sheet?
Correct Answer: Ownership & Debt
Which term is defined as the residual interest in the net assets of a company?
Correct Answer: Owners' equity
A corporation has total liabilities of $300 million, total owners' equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets?
Correct Answer: $350 million
Which situation should result in revenue recognition on the income statement for the
year ending 12/31/14 if the firm is using accrual-basis accounting?
Correct Answer: In 2014, a company provides services to a customer for which cash
will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and
payments to owners and creditors of the company?
Correct Answer: Cash flows from financing activities
Cash flows from financing activities
Correct Answer: In the notes to financial statements
Which assurance does an external audit report provide for its readers?
Correct Answer: The company's financial statements fairly reflect its financial position
Information that can be verified
, Correct Answer: Reliable
Information having to do with the matter at hand
Correct Answer: Relevant
Information that is important enough to make a difference
Correct Answer: Material
Information related to recognizing losses as they occur
Correct Answer: Conservatism
Which form of debt should be reported in the long-term liability category
Correct Answer: Notes payable expected to be paid in 18 months
What will be the impact of the January 5 event on the company's balance sheet on that
date given the following:
January 5 The corporation purchased equipment to be used in the business for
$200,000 cash.
Correct Answer: Equipment will increase $200,000, and cash will decrease $200,000.
Which two values affect the measurement of net income
Correct Answer: Operating expenses & Ordinary gains and losses
Which two items' subtotals are included in a multi-step income statement
Correct Answer: Gross profit & Income from operations
C213 Pre-Assessment Exam Questions and
Answers Already Graded A+ Latest 2025
Which of the following is NOT a reason for the integration of worldwide accounting
standards?
Correct Answer: the theoretical necessity of a common set of accounting standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices
Correct Answer: True
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance.
Correct Answer: False
Increased federal oversight of the audit process resulted from the passage of the
following act of Congress
Correct Answer: Sarbanes-Oxley Act
Steps in the decision cycle from first (1) to last (5)
Correct Answer: Prepare financial statements
Analyze financial statements
,Gather information
Make decision
Implement decision
What is the price-earnings (PE) ratio for this company?
Partial financial information for a company is as follows:
Current assets $36,543
Total assets $58,719
Current liabilities $24,824
Total liabilities $48,561
Stockholders' equity $10,158
Sales $46,997
Net Income $ 3,761
Market value of shares $41,316
Correct Answer: 11.0
What does it mean if a company has a debt ratio of 101.5%?
Correct Answer: The company has 1.5% more total liabilities than total assets.
What is consistent with a continual decline in gross profit if the firm's cost of goods sold
remains the same?
Correct Answer: Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow?
Correct Answer: $6,991/$5,486 & $5,220/$1,875
,What two items of information are revealed on the balance sheet?
Correct Answer: Ownership & Debt
Which term is defined as the residual interest in the net assets of a company?
Correct Answer: Owners' equity
A corporation has total liabilities of $300 million, total owners' equity of $100 million, and
current assets of $50 million. What is the value of the firm's long-term assets?
Correct Answer: $350 million
Which situation should result in revenue recognition on the income statement for the
year ending 12/31/14 if the firm is using accrual-basis accounting?
Correct Answer: In 2014, a company provides services to a customer for which cash
will be collected the next year (2015).
Which category on the statement of cash flows summarizes cash receipts and
payments to owners and creditors of the company?
Correct Answer: Cash flows from financing activities
Cash flows from financing activities
Correct Answer: In the notes to financial statements
Which assurance does an external audit report provide for its readers?
Correct Answer: The company's financial statements fairly reflect its financial position
Information that can be verified
, Correct Answer: Reliable
Information having to do with the matter at hand
Correct Answer: Relevant
Information that is important enough to make a difference
Correct Answer: Material
Information related to recognizing losses as they occur
Correct Answer: Conservatism
Which form of debt should be reported in the long-term liability category
Correct Answer: Notes payable expected to be paid in 18 months
What will be the impact of the January 5 event on the company's balance sheet on that
date given the following:
January 5 The corporation purchased equipment to be used in the business for
$200,000 cash.
Correct Answer: Equipment will increase $200,000, and cash will decrease $200,000.
Which two values affect the measurement of net income
Correct Answer: Operating expenses & Ordinary gains and losses
Which two items' subtotals are included in a multi-step income statement
Correct Answer: Gross profit & Income from operations
