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Exam 16: Understanding Accounting and Financial Information

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Question 41

True/False

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To find out details of the maintenance costs,within the accounting system,you should refer to the ledger.

A) True
B) False

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Question 42

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The accounting book or computer program where each day's transactions are first recorded is called a:

A) posting workbook.
B) general ledger.
C) balance sheet.
D) journal.

E) A) and D)
F) A) and C)

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Question 43

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Accounting is not important for nonprofit organizations since financial data is generally not critical to their success.

Activities of managerial accountants include measuring and reporting the costs of production,marketing,and other functions within the organization.

In an effort to maintain a competitive advantage,most firms do not share accounting information with people outside of the firm.

Brianne is a bookkeeper for Kitty Creations Limited.Part of her job would be to take the firm's transactions and record them in books or computer programs referred to as:

Our Gang Transfer Company has shown consistent profits over the past five years.However,the company has recently found itself in financial trouble due to cash shortages.This indicates that:

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n) ________ performed.

The first step in the accounting cycle is posting information regarding business transactions into the ledgers.

Amortization is the write-off of the cost of a tangible asset over its estimated lifetime.

Felicia is a public accountant.She has been asked to prepare the financial statements for McNick's Auto Body Shop.She is at the stage of the accounting cycle where she wants to summarize all of the data in the accounting ledgers to see whether the figures appear to be correct and balanced.Felicia will need to prepare a statement of cash flows in order to complete this stage of the cycle.

Cash a firm raises from issuing new debt or equity capital would be reported on a statement of cash flows.

The Sarbanes-Oxley Act clarifies the roles of both private and public accountants.

A look at the EPS ratio for a corporation will give you insights into its ability to pay a dividend to its stockholders.

After recording a business' transactions,accountants usually classify the transactions into groups with common characteristics.

The equipment a firm owns and the money it has in its bank account would both be considered among its assets.

Which financial statement reports the company's revenues and selling costs over a period of time?

Revenues,cost of goods,and expenses would all be reported on a firm's income statement.

The firm's most valuable assets are listed at top of its balance sheet.

Accountant Alan Wingspan has just finished working on the balance sheet,income statement,and statement of cash flows for his company.The next step in the accounting cycle will involve: