What does accounting focus on? - ANSWER The impact a business's activities have
on its overall financial performance
Which report summarizes cash collections and cash expenditures from operating,
investing, and financing activities over a period of time? - ANSWER Statement of
cash flows
Which users would have a primary concern with an organization's ability to provide
healthcare benefits? - ANSWER Employees
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - ANSWER The Public Company
Accounting Oversight Board (PCAOB)
What has had the most significant impact on accounting practices? - ANSWER
Information technology
What two items of information are revealed on the balance sheet?
Choose 2 answers - ANSWER Ownership.
Debt
Which term is defined as the residual interest in the net assets of a company? -
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? - 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? - 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? - ANSWER Cash flows from
financing activities
Where would an investor find a summary of a company's significant accounting
policies? - ANSWER In the notes to financial statements
Which assurance does an external audit report provide for its readers? - ANSWER
The company's financial statements fairly reflect its financial position
, Reliable - ANSWER Information that can be verified
Relevant - ANSWER Information having to do with the matter at hand
Material - ANSWER Information that is important enough to make a difference
Conservatism - ANSWER Information related to recognizing losses as they occur
steps in the decision cycle - ANSWER 1 Prepare financial statements.
2 Analyze financial statements.
3 Gather information.
4 Make decision.
5 Implement decision
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
What is the price-earnings (PE) ratio for this company? - ANSWER 11.0
What is consistent with a continual decline in gross profit if the firm's cost of goods
sold remains the same? - ANSWER Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow? - ANSWER
$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11? - ANSWER Cash
before interest and taxes of $11,000 / cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category? -
ANSWER Notes payable expected to be paid in 18 months
In January of year 1, a company began doing business as a corporation in order to
sell technology-related accessories and services. During its first month of operations,
the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to
stockholders.
on its overall financial performance
Which report summarizes cash collections and cash expenditures from operating,
investing, and financing activities over a period of time? - ANSWER Statement of
cash flows
Which users would have a primary concern with an organization's ability to provide
healthcare benefits? - ANSWER Employees
Which body regulates a certified public accounting firm's audit practices when the
firm is auditing a large publicly traded company? - ANSWER The Public Company
Accounting Oversight Board (PCAOB)
What has had the most significant impact on accounting practices? - ANSWER
Information technology
What two items of information are revealed on the balance sheet?
Choose 2 answers - ANSWER Ownership.
Debt
Which term is defined as the residual interest in the net assets of a company? -
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? - 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? - 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? - ANSWER Cash flows from
financing activities
Where would an investor find a summary of a company's significant accounting
policies? - ANSWER In the notes to financial statements
Which assurance does an external audit report provide for its readers? - ANSWER
The company's financial statements fairly reflect its financial position
, Reliable - ANSWER Information that can be verified
Relevant - ANSWER Information having to do with the matter at hand
Material - ANSWER Information that is important enough to make a difference
Conservatism - ANSWER Information related to recognizing losses as they occur
steps in the decision cycle - ANSWER 1 Prepare financial statements.
2 Analyze financial statements.
3 Gather information.
4 Make decision.
5 Implement decision
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
What is the price-earnings (PE) ratio for this company? - ANSWER 11.0
What is consistent with a continual decline in gross profit if the firm's cost of goods
sold remains the same? - ANSWER Continual decrease in sales
Which two cash flow adequacy ratios represent a cash cow? - ANSWER
$6,991/$5,486. $5,220/$1,875.
Which formula yields a cash times interest earned ratio of 11? - ANSWER Cash
before interest and taxes of $11,000 / cash paid for interest of $1,000
Which form of debt should be reported in the long-term liability category? -
ANSWER Notes payable expected to be paid in 18 months
In January of year 1, a company began doing business as a corporation in order to
sell technology-related accessories and services. During its first month of operations,
the following events occurred:
January 1
The corporation received $1,000,000 in cash in exchange for stock issued to
stockholders.
