BUSN 100 - Chapter 14 Exam Questions and Answers Fully Solved Latest Update 2025-2026
Which of the following is an example of an intangible asset for a manufacturer of padlocks? - Answersa
patent on titanium lock mechanism
Recent legislation has decreased the roles of the chief audit executive (CAE). - AnswersFalse
A(n) _____ is a yearly document that describes a firm's financial status and usually discusses a firm's
financial activities during the past year and its prospects for the future. - Answersannual report
After all expenses have been subtracted from revenues on an income statement, the final figure or
bottom line is called the _____ when it is a negative number. - Answersnet loss
The postage stamps and petty cash in the architect's drawer as well as his drawing table, his office
furniture, and money owed to him by clients are all examples of assets. - AnswersTrue
Current assets, such as marketable securities and inventory, usually are expected to be turned into cash
within: - Answersone year
Larry's Kite Shack operates on the Florida beaches during the tourist season. Last year, Larry sold
$25,000 worth of kites. His cost of goods was $7,000, and he paid himself a salary of $20,000. On an
income statement, Larry's business would have a(n): - Answersnet loss
The difference between net sales and cost of goods sold is: - Answersgross profit
Which of the following is an example of a liability that might be owned by an antique mall? -
Answersmoney owed to utility companies
An accountant who has a bachelor's degree, passes a test prepared by the professional organization
AICPA, and has a certain number of years of on-the-job training becomes a: - Answerscertified public
accountant
Which of the following is NOT an example of a cost of goods sold for a manufacturer of electric fans? -
Answerssales commissions
Assume a company has inventory valued at $50,000, its total current assets, including this inventory,
total $90,000. Its total current liabilities total $20,000. Its quick ratio is: - Answers2
The _____ ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted
from current assets. - Answersacid-test
Which of the following calculations is a formal expression of the accounting equation? - Answersassets =
liabilities + owners' equity?
Independent accountants who serve organizations and individuals on a fee basis are called public
accountants. - AnswersTrue
, _____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm.
- AnswersFinancial accounting; Managerial accounting
_____ is the system used to record a firm's financial transactions in a routine and clerical process. -
AnswersBookkeeping
On a statement of cash flows for a pizza restaurant, the cash flows from investment activities section
would include: - Answersthe brick oven stove used to cook the pizzas
Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in
financial statements? - Answersoperating
After all expenses have been subtracted from revenues on an income statement, the final figure or
bottom line is called the _____ when it is a positive number. - Answersnet profit
Which of the following is NOT one of the six steps in the accounting cycle? - Answerspaying accounts
payable
An accounting journal is a chronological list of transactions, each assigned to a particular account. -
AnswersTrue
Which of the following is the BEST example of a current asset for a university bookstore? -
Answerscredit card charges by book buyers
The last step in the accounting cycle is to: - Answersthe other analyze (long)
Profitability ratios measure how well a firm uses its assets. - AnswersFalse
A small company that trains executives on how to act when working in Japan had $70,000 worth of
inventory on January 1, 2018, and it had $50,000 worth of inventory on December 31, 2018. If its cost of
services provided for that period was $30,000, and its net profit was $90,000, what was its inventory to
turnover ratio? - Answers2 times
What type of expense would be shown on an income statement when the owner of a dirt racing track
promoted an upcoming race by purchasing advertising time on a local radio station? - Answersoperating
On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities
would include: - Answersthe money borrowed to purchase the furniture in the tutorial area and the
interest owed on that debt
On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from
investment activities section would include: - Answersthe sale of land adjacent to the manufacturer's
administrative office building
Haley Optics manufactures lenses used in cameras, binoculars, and scientific equipment. It had sales of
$300,000 during the last quarter. It depreciated assets during the year by $20,000. The Earnings before
Which of the following is an example of an intangible asset for a manufacturer of padlocks? - Answersa
patent on titanium lock mechanism
Recent legislation has decreased the roles of the chief audit executive (CAE). - AnswersFalse
A(n) _____ is a yearly document that describes a firm's financial status and usually discusses a firm's
financial activities during the past year and its prospects for the future. - Answersannual report
After all expenses have been subtracted from revenues on an income statement, the final figure or
bottom line is called the _____ when it is a negative number. - Answersnet loss
The postage stamps and petty cash in the architect's drawer as well as his drawing table, his office
furniture, and money owed to him by clients are all examples of assets. - AnswersTrue
Current assets, such as marketable securities and inventory, usually are expected to be turned into cash
within: - Answersone year
Larry's Kite Shack operates on the Florida beaches during the tourist season. Last year, Larry sold
$25,000 worth of kites. His cost of goods was $7,000, and he paid himself a salary of $20,000. On an
income statement, Larry's business would have a(n): - Answersnet loss
The difference between net sales and cost of goods sold is: - Answersgross profit
Which of the following is an example of a liability that might be owned by an antique mall? -
Answersmoney owed to utility companies
An accountant who has a bachelor's degree, passes a test prepared by the professional organization
AICPA, and has a certain number of years of on-the-job training becomes a: - Answerscertified public
accountant
Which of the following is NOT an example of a cost of goods sold for a manufacturer of electric fans? -
Answerssales commissions
Assume a company has inventory valued at $50,000, its total current assets, including this inventory,
total $90,000. Its total current liabilities total $20,000. Its quick ratio is: - Answers2
The _____ ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted
from current assets. - Answersacid-test
Which of the following calculations is a formal expression of the accounting equation? - Answersassets =
liabilities + owners' equity?
Independent accountants who serve organizations and individuals on a fee basis are called public
accountants. - AnswersTrue
, _____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm.
- AnswersFinancial accounting; Managerial accounting
_____ is the system used to record a firm's financial transactions in a routine and clerical process. -
AnswersBookkeeping
On a statement of cash flows for a pizza restaurant, the cash flows from investment activities section
would include: - Answersthe brick oven stove used to cook the pizzas
Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in
financial statements? - Answersoperating
After all expenses have been subtracted from revenues on an income statement, the final figure or
bottom line is called the _____ when it is a positive number. - Answersnet profit
Which of the following is NOT one of the six steps in the accounting cycle? - Answerspaying accounts
payable
An accounting journal is a chronological list of transactions, each assigned to a particular account. -
AnswersTrue
Which of the following is the BEST example of a current asset for a university bookstore? -
Answerscredit card charges by book buyers
The last step in the accounting cycle is to: - Answersthe other analyze (long)
Profitability ratios measure how well a firm uses its assets. - AnswersFalse
A small company that trains executives on how to act when working in Japan had $70,000 worth of
inventory on January 1, 2018, and it had $50,000 worth of inventory on December 31, 2018. If its cost of
services provided for that period was $30,000, and its net profit was $90,000, what was its inventory to
turnover ratio? - Answers2 times
What type of expense would be shown on an income statement when the owner of a dirt racing track
promoted an upcoming race by purchasing advertising time on a local radio station? - Answersoperating
On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities
would include: - Answersthe money borrowed to purchase the furniture in the tutorial area and the
interest owed on that debt
On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from
investment activities section would include: - Answersthe sale of land adjacent to the manufacturer's
administrative office building
Haley Optics manufactures lenses used in cameras, binoculars, and scientific equipment. It had sales of
$300,000 during the last quarter. It depreciated assets during the year by $20,000. The Earnings before
