Accounting 211 Exam 1 Complete
Study Guide (Questions & Answers)
| Brand New Version
1. A statement of cash flows is generated to show - ANSWER The inflow and
outflow of cash during the time period
2. Which of the following sections of the statement of cash flows is presented
differently between the direct and indirect method? - ANSWER Operating
activities
3. Which of the following is the typical order of the sections on a statement of
cash flows? - ANSWER Operating, Investing, financing
4. Manufacturing cost flow from Work-In-Process inventory to Cost of Goods
Sold to finished goods inventory - ANSWER False
5. Which of the following statements is true of costing systems? - ANSWER
An accounting firm would likely use a job order costing system.
6. Which of the following is correctly describes the term cost driver? -
ANSWER The primary factor that causes a cost to be incurred
7. The predetermined overhead allocation rate is the rate used to - ANSWER
Allocate estimated manufacturing overhead costs to jobs.
,8. Over allocated manufacturing overhead costs occur when the manufacturing
overhead costs are greater than the amount actually incurred. - ANSWER
True
9. Debt Ratio - ANSWER TL/TA
How fast a company can pay off debt with current assets
10.Inventory turnover - ANSWER COGS/Average Inventory
Number of times a company sells its average inventory during a year.
11.Describe Accounting - ANSWER Provides reports to users, organizes
financial data, describes the economic activities and condition of the
business.
12.Who uses financial statements and reports - ANSWER Internal users:
Owners, management, employees, board of directors. External users:
Government, stockholders (shareholders, investors), creditors.
13.list General-Purpose Financial Statements - ANSWER Include Income
Statement, Balance sheet, Statement of Stockholder's Equity, and Statement
of Cash Flows.
14.What are Service Businesses - ANSWER Provide services such as
insurance, rental companies, airlines, and theme parks.
15.What are Retail Businesses - ANSWER Sell products purchased from other
businesses, e.g., clothing stores, Walmart, Amazon, Target.
, 16.what are Manufacturing Businesses - ANSWER Transform inputs into
products for sale, e.g., Ford, GM, Briggs and Stratton.
17.Ethical Guidelines - ANSWER Include identifying decision consequences,
considering obligations to affected parties, and making decisions based on
honesty and fairness.
18.The activities that are included in the financing activities section of the
statement of cash flow are - ANSWER Activities that involve stockholder's
equity
19.Which of the following activities are included in the investing section of the
statement of cash flows? - ANSWER Activities that increase or decrease
long-term assets
20.When preparing the statement of cash flows using the indirect method,
depreciation expense is subtracted from net income under operating
activities - ANSWER False
21.Which of the following is generally undesirable? - ANSWER Decrease in
days' sales in receivable
22.Which of the following is not a part of a corporation's annual report? -
ANSWER Horizontal and vertical analysis
23.Which of the following statements, regarding management's discussion and
analysis (MD&A) part of the annual report is not correct? - ANSWER
Investors are not interested in the MD&A because it is written by the
company and could present a biased view of the company's financial
condition. (FALSE, People want this)
Study Guide (Questions & Answers)
| Brand New Version
1. A statement of cash flows is generated to show - ANSWER The inflow and
outflow of cash during the time period
2. Which of the following sections of the statement of cash flows is presented
differently between the direct and indirect method? - ANSWER Operating
activities
3. Which of the following is the typical order of the sections on a statement of
cash flows? - ANSWER Operating, Investing, financing
4. Manufacturing cost flow from Work-In-Process inventory to Cost of Goods
Sold to finished goods inventory - ANSWER False
5. Which of the following statements is true of costing systems? - ANSWER
An accounting firm would likely use a job order costing system.
6. Which of the following is correctly describes the term cost driver? -
ANSWER The primary factor that causes a cost to be incurred
7. The predetermined overhead allocation rate is the rate used to - ANSWER
Allocate estimated manufacturing overhead costs to jobs.
,8. Over allocated manufacturing overhead costs occur when the manufacturing
overhead costs are greater than the amount actually incurred. - ANSWER
True
9. Debt Ratio - ANSWER TL/TA
How fast a company can pay off debt with current assets
10.Inventory turnover - ANSWER COGS/Average Inventory
Number of times a company sells its average inventory during a year.
11.Describe Accounting - ANSWER Provides reports to users, organizes
financial data, describes the economic activities and condition of the
business.
12.Who uses financial statements and reports - ANSWER Internal users:
Owners, management, employees, board of directors. External users:
Government, stockholders (shareholders, investors), creditors.
13.list General-Purpose Financial Statements - ANSWER Include Income
Statement, Balance sheet, Statement of Stockholder's Equity, and Statement
of Cash Flows.
14.What are Service Businesses - ANSWER Provide services such as
insurance, rental companies, airlines, and theme parks.
15.What are Retail Businesses - ANSWER Sell products purchased from other
businesses, e.g., clothing stores, Walmart, Amazon, Target.
, 16.what are Manufacturing Businesses - ANSWER Transform inputs into
products for sale, e.g., Ford, GM, Briggs and Stratton.
17.Ethical Guidelines - ANSWER Include identifying decision consequences,
considering obligations to affected parties, and making decisions based on
honesty and fairness.
18.The activities that are included in the financing activities section of the
statement of cash flow are - ANSWER Activities that involve stockholder's
equity
19.Which of the following activities are included in the investing section of the
statement of cash flows? - ANSWER Activities that increase or decrease
long-term assets
20.When preparing the statement of cash flows using the indirect method,
depreciation expense is subtracted from net income under operating
activities - ANSWER False
21.Which of the following is generally undesirable? - ANSWER Decrease in
days' sales in receivable
22.Which of the following is not a part of a corporation's annual report? -
ANSWER Horizontal and vertical analysis
23.Which of the following statements, regarding management's discussion and
analysis (MD&A) part of the annual report is not correct? - ANSWER
Investors are not interested in the MD&A because it is written by the
company and could present a biased view of the company's financial
condition. (FALSE, People want this)
