Question 1

The balance sheet uses all of the following account titles to describe assets except

Accepted Answer

A)  accounts receivable.
B)  cash.
C)  inventory.
D)  current assets.
E)  deferred income taxes.F) B) and D)
G) C) and D) E

Question 2

Assets are a firm's economic resources.

Accepted Answer

A) True 
 B)False

Question 3

Expenses can be incurred daily.

Accepted Answer

A) True 
 B)False

Question 4

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the

Accepted Answer

A)  statement of cash flows.
B)  balance sheet.
C)  income statement.
D)  master budget.
E)  profit-loss statement.F) C) and D)
G) A) and C)

Question 5

Morgan was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its

Accepted Answer

A)  current ratio.
B)  receivable turnover.
C)  inventory turnover.
D)  earnings per share.
E)  book value per share.F) B) and C)
G) A) and B)

Question 6

What are income statements temporary in nature?

Accepted Answer

Gross profit,earnings before interest an...

Question 7

The financial statement that represents an accumulation of all of a company's transactions since it began is the

Accepted Answer

A)  income statement.
B)  balance sheet.
C)  profit and loss statement.
D)  statement of cash flow.
E)  income tax form.F) B) and D)
G) A) and E)

Question 8

What have you done to identify and fix BrainDrain's problems?

Accepted Answer

A)  You looks at the statement of cash flows and found nothing wrong
B)  You did some ratio analysis
C)  You asked an advisor to identify and solve the issue
D)  You have asked for a complete set of the company's financial statements
E)  Nothing because you do not have the appropriate expertiseF) D) and E)
G) A) and C)

Question 9

All of the following are outsiders who rely on information from an organization's financial statements except

Accepted Answer

A)  lenders.
B)  the Internal Revenue Service.
C)  stockholders.
D)  creditors.
E)  managers.F) D) and E)
G) A) and B)

Question 10

The accounting cycle includes all but which of the following?

Accepted Answer

A)  Examine source documents.
B)  Record transactions.
C)  Post transactions.
D)  Prepare financial statements.
E)  Generate annual reports.F) D) and E)
G) B) and C)

Question 11

Bookkeeping is only one aspect of accounting and involves the recording of routine,day-to-day business transactions.

Accepted Answer

A) True 
 B)False

Question 12

The debts Anna's Flowers owes to the Small Business Administration and her company's suppliers represent which of the following?

Accepted Answer

A)  Owners' equity
B)  Assets
C)  Liabilities
D)  Stock
E)  BondsF) A) and B)
G) A) and E) C

Question 13

All of a firm's unpaid financial obligations are occasionally consolidated into an account called

Accepted Answer

A)  current liabilities.
B)  accounts payable.
C)  cost of goods sold.
D)  accrued expenses.
E)  long-term liabilities.F) A) and E)
G) C) and D)

Question 14

___________ is an account showing money owed to a company by its clients or customers.

Accepted Answer

A)  Accounts payable
B)  Accounts receivable
C)  Current assets
D)  Current liabilities
E)  Balance sheetF) A) and B)
G) A) and E)

Question 15

The terms accounting and bookkeeping are interchangeable because they mean almost the same thing.

Accepted Answer

A) True 
 B)False

Question 16

The owners' contributions to a company and all earnings retained to finance continued growth and product development are

Accepted Answer

A)  owners' equity.
B)  assets.
C)  liabilities.
D)  revenue.
E)  profits.F) A) and B)
G) B) and E)

Question 17

When an accountant allocates the cost of a piece of equipment over a period of time,this is called

Accepted Answer

A)  discounting.
B)  encumberment.
C)  cost plus.
D)  expense designation.
E)  depreciation.F) A) and B)
G) A) and C)

Question 18

Only businesses use accounting information to demonstrate how their funds are being used.

Accepted Answer

A) True 
 B)False

Question 19

What are the fundamentals of the accounting process?

Accepted Answer

A)  Journals and ledgers
B)  The accounting equation and the double-entry bookkeeping system
C)  The accounting equation and the accounting cycle
D)  Double-entry bookkeeping and the accounting cycle
E)  Ledgers and financial statementsF) B) and E)
G) A) and B) B

Question 20

A company's short-term financial obligations are called its

Accepted Answer

A)  assets.
B)  equity.
C)  net profit.
D)  current liabilities.
E)  accounts payable.F) C) and D)
G) None of the above

Exam 14: Money and the Financial System

The balance sheet uses all of the following account titles to describe assets except

Correct AnswerverifiedE

Assets are a firm's economic resources.

Correct AnswerverifiedShow Answer

Expenses can be incurred daily.

Correct AnswerverifiedShow Answer

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the

Correct AnswerverifiedShow Answer

Morgan was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its

Correct AnswerverifiedShow Answer

What are income statements temporary in nature?

Correct AnswerverifiedGross profit,earnings before interest an...View AnswerShow Answer

The financial statement that represents an accumulation of all of a company's transactions since it began is the

Correct AnswerverifiedShow Answer

What have you done to identify and fix BrainDrain's problems?

Correct AnswerverifiedShow Answer

All of the following are outsiders who rely on information from an organization's financial statements except

Correct AnswerverifiedShow Answer

The accounting cycle includes all but which of the following?

Correct AnswerverifiedShow Answer

Bookkeeping is only one aspect of accounting and involves the recording of routine,day-to-day business transactions.

Correct AnswerverifiedShow Answer

The debts Anna's Flowers owes to the Small Business Administration and her company's suppliers represent which of the following?

Correct AnswerverifiedC

All of a firm's unpaid financial obligations are occasionally consolidated into an account called

Correct AnswerverifiedShow Answer

___________ is an account showing money owed to a company by its clients or customers.

Correct AnswerverifiedShow Answer

The terms accounting and bookkeeping are interchangeable because they mean almost the same thing.

Correct AnswerverifiedShow Answer

The owners' contributions to a company and all earnings retained to finance continued growth and product development are

Correct AnswerverifiedShow Answer

When an accountant allocates the cost of a piece of equipment over a period of time,this is called

Correct AnswerverifiedShow Answer

Only businesses use accounting information to demonstrate how their funds are being used.

Correct AnswerverifiedShow Answer

What are the fundamentals of the accounting process?

Correct AnswerverifiedB

A company's short-term financial obligations are called its

Correct AnswerverifiedShow Answer

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E

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Gross profit,earnings before interest an...
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C

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B

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