UNH ADMN400 Final UPDATED ACTUAL
Exam Questions and CORRECT Answers
Which of the following terms refers to the recording of financial transactions? - CORRECT
ANSWER - Bookkeeping
Which of the following bodies formulates the generally accepted accounting principles (GAAP)?
- CORRECT ANSWER - Financial Accounting Standards Board
Which of the following bodies enforces accounting and auditing rules and procedures? -
CORRECT ANSWER - Securities and Exchange Commission
How do certified public accountants ensure a company's financial reports really represent its
operations? - CORRECT ANSWER - By conducting an audit
Which of the following terms refers to the amount of money that owners would receive if they
sold all of a company's assets and paid all of its liabilities? - CORRECT ANSWER -
Owners' equity
Which of the following describes a liability? - CORRECT ANSWER - A debt owed by a
firm to an outside organization or individual
A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its
owners' equity? - CORRECT ANSWER - $2 million
How much profit does a company which has a total of $5 million invested by its owners and $4
million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1? -
CORRECT ANSWER - $7 million
What distinguishes the two most commonly used categories of owners' equity? - CORRECT
ANSWER - The source of the equity --investments versus earnings
, Which of the following BEST demonstrates cash flow from operations? - CORRECT
ANSWER - Transactions involved in buying and selling goods and services
Which of the following describes assets such as land, building, and equipment? - CORRECT
ANSWER - Fixed assets
Which of the following BEST describes depreciation? - CORRECT ANSWER - The
process of reducing the value of fixed assets over time
Which of the following describes assets such as patents and trademarks? - CORRECT
ANSWER - Intangible assets
Financial statements that do not include interpretation and explanation by management are in
violation of which GAAP principle? - CORRECT ANSWER - Principle of full disclosure
Which of the following ratios measures a firm's ability to meet its current debt obligations? -
CORRECT ANSWER - Short-term solvency ratio
Which of the following ratios measures a firm's potential earnings? - CORRECT
ANSWER - Profitability ratio
Which of the following ratios evaluates management's use of resources? - CORRECT
ANSWER - Activity ratio
Why is the long-term solvency ratio important for stakeholders? - CORRECT ANSWER -
It may indicate collapse or takeover opportunities.
When might high debt levels be a benefit to an organization? - CORRECT ANSWER -
When trying to make otherwise unaffordable investments
Exam Questions and CORRECT Answers
Which of the following terms refers to the recording of financial transactions? - CORRECT
ANSWER - Bookkeeping
Which of the following bodies formulates the generally accepted accounting principles (GAAP)?
- CORRECT ANSWER - Financial Accounting Standards Board
Which of the following bodies enforces accounting and auditing rules and procedures? -
CORRECT ANSWER - Securities and Exchange Commission
How do certified public accountants ensure a company's financial reports really represent its
operations? - CORRECT ANSWER - By conducting an audit
Which of the following terms refers to the amount of money that owners would receive if they
sold all of a company's assets and paid all of its liabilities? - CORRECT ANSWER -
Owners' equity
Which of the following describes a liability? - CORRECT ANSWER - A debt owed by a
firm to an outside organization or individual
A company has an assets-to-liabilities ratio of 3:2 and total assets worth $6 million. What is its
owners' equity? - CORRECT ANSWER - $2 million
How much profit does a company which has a total of $5 million invested by its owners and $4
million in liabilities need to make in order to have an assets-to-liabilities ratio of 2:1? -
CORRECT ANSWER - $7 million
What distinguishes the two most commonly used categories of owners' equity? - CORRECT
ANSWER - The source of the equity --investments versus earnings
, Which of the following BEST demonstrates cash flow from operations? - CORRECT
ANSWER - Transactions involved in buying and selling goods and services
Which of the following describes assets such as land, building, and equipment? - CORRECT
ANSWER - Fixed assets
Which of the following BEST describes depreciation? - CORRECT ANSWER - The
process of reducing the value of fixed assets over time
Which of the following describes assets such as patents and trademarks? - CORRECT
ANSWER - Intangible assets
Financial statements that do not include interpretation and explanation by management are in
violation of which GAAP principle? - CORRECT ANSWER - Principle of full disclosure
Which of the following ratios measures a firm's ability to meet its current debt obligations? -
CORRECT ANSWER - Short-term solvency ratio
Which of the following ratios measures a firm's potential earnings? - CORRECT
ANSWER - Profitability ratio
Which of the following ratios evaluates management's use of resources? - CORRECT
ANSWER - Activity ratio
Why is the long-term solvency ratio important for stakeholders? - CORRECT ANSWER -
It may indicate collapse or takeover opportunities.
When might high debt levels be a benefit to an organization? - CORRECT ANSWER -
When trying to make otherwise unaffordable investments
