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Exam 17: Understanding Accounting and Financial Information

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Question 31

True/False

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Jerome is an accountant employed full time by The Newport Company. Jerome is an example of a public accountant.

A) True
B) False

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Question 32

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Calvin works in the accounting department for a textbook publishing firm preparing budgets and reporting production costs. What job does Calvin hold?

A) managerial accountant
B) financial accountant
C) tax accountant
D) auditor

E) A) and B)
F) B) and C)

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Question 33

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Chloe is categorizing journal entries in order to post to the ________.

The value of resources the firm owns, minus the amount of money the firm owes to others =

The sole purpose of accounting is to help managers evaluate the financial condition of the firm so that they may make better pricing decisions.

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

Kayla and Kingston run a shuttle service from Water Tower Place to Chicago O'Hare airport. Last month, they recorded the following: Kayla and Kingston's gross profit for the past month was

Which of the following agencies would have the greatest impact on the methods used to record, classify, summarize, and interpret accounting information for the State of Kentucky's Department of Transportation?

The financial ratios that measure a firm's ability to pay its short-term debts are called

Lyell owns his own small business, but he doesn't want to be bothered with accounting information. He tells his friends, "All I need accounting for is to prepare my income tax return for my business. I'll hire someone to do that for me." Lyell's attitude would be disastrous if he managed a large firm, but it is a reasonable view for a small business owner.

Debts that are due in one year or less are classified on the balance sheet as

Eric holds a bachelor's degree in accounting and additional training in tax law. He is responsible for preparing tax returns and developing tax strategies for his employer, and has done so for the past seven years. Eric is a certified government accountant.

Debts owed by a business are called

Activity ratios measure the effectiveness of the firm's management in using its various resources to achieve profits.

Accountants record, classify, and ________ the results of the financial information they gather.

With increased computer technology, the ability to read and understand financial statements is no longer an important skill for managers.

Given that measuring a firm's financial health is important to its survival, which of the following strategies is good advice for a person just starting a business?

A tax accountant is responsible for preparing tax returns and developing tax strategies.

A(n) ________ is a yearly published statement of the financial condition, progress, and expectations of an organization.

An income statement reports what a company owns and owes on a certain day.