Question 1

The accounting statement that reports cash receipts and disbursements for a business is called the:

Accepted Answer

A)  income statement.
B)  balance sheet.
C)  cash flow statement.
D)  cash basis trial balance.E) B) and C)
F) A) and B)

Question 2

________ measures the amount of profit earned by a company for each share of outstanding common stock.

Accepted Answer

A)  Basic earnings per share (basic EPS) 
B)  Diluted earnings per share (diluted EPS) 
C)  Simple earnings per share (simple EPS) 
D)  Return on shares outstanding (RSO) E) None of the above
F) A) and B)

Question 3

Many business decisions are made in hopes of improving a firm's "bottom line".Which of the following financial statements will reflect a firm's "bottom line?"

Accepted Answer

A)  income statement
B)  balance sheet
C)  cash flow statement
D)  trial balanceE) A) and C)
F) A) and D)

Question 4

An extremely high inventory turnover ratio may represent lost sales due to holding inadequate stocks of merchandise.

Accepted Answer

A) True 
 B)False

Question 5

The accounting profession is divided into two main fields: bookkeeping and auditing.

Accepted Answer

A) True 
 B)False

Question 6

A basic purpose of accounting is to:

Accepted Answer

A)  provide financial information that is useful to decision makers HYPERLINK "" .
B)  show a profit
C)  track employee productivity
D)  act as a tool for the human relations departmentE) A) and D)
F) A) and C)

Question 7

Financial accounting is used to provide information and analysis that managers within the organization can use to assist them in decision making.

Accepted Answer

A) True 
 B)False

Question 8

General expenses would include office salaries,rent,and insurance.

Accepted Answer

A) True 
 B)False

Question 9

__________ is the accounting practice of recording every transaction in two places.

Accepted Answer

A)  Double-entry bookkeeping
B)  Trial balancing
C)  Account matching
D)  Entry duplicationE) A) and C)
F) A) and B)

Question 10

Accounting transactions are very important to a firm's operations.All of the following activities would affect account balances EXCEPT:

Accepted Answer

A)  buying and selling goods and services.
B)  using supplies.
C)  paying taxes.
D)  forecasting consumer demand.E) B) and D)
F) None of the above

Question 11

The "bottom line" of an income statement is the net worth of the firm.

Accepted Answer

A) True 
 B)False

Question 12

The balance sheet reports revenues and selling costs for a period of time.

Accepted Answer

A) True 
 B)False

Question 13

When a firm sells merchandise from its inventory,there are different techniques used to calculate the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 14

How many professional accounting designations does Canada have?

Accepted Answer

A)  One
B)  Two
C)  Three
D)  FourE) All of the above
F) A) and B)

Question 15

Accounting software for small businesses has become so sophisticated that most small business owners will never need to consult with an actual accountant.

Accepted Answer

A) True 
 B)False

Question 16

In Canada,there are three different professional accounting designations.

Accepted Answer

A) True 
 B)False

Question 17

The financial ratios that measure management's effectiveness in using the assets of the organization are called the ________ ratios.

Accepted Answer

A)  leverage
B)  liquidity
C)  activity
D)  profitabilityE) None of the above
F) A) and B)

Question 18

What is the major problem a Canadian company faces when they look to form a joint venture globally?

Accepted Answer

One problem that oft...

Question 19

_________ is the systematic write-off of the value of a tangible asset over its useful life.

Accepted Answer

A)  Expense structuring
B)  Amortization
C)  Capital budgeting
D)  Gross margin allocationE) A) and D)
F) B) and D)

Question 20

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Accepted Answer

A) True 
 B)False

Exam 16: Understanding Accounting and Financial Information

In Canada,there are three different professional accounting designations.

Correct AnswerverifiedShow Answer

The "bottom line" of an income statement is the net worth of the firm.

Correct AnswerverifiedShow Answer

General expenses would include office salaries,rent,and insurance.

Correct AnswerverifiedShow Answer

Many business decisions are made in hopes of improving a firm's "bottom line".Which of the following financial statements will reflect a firm's "bottom line?"

Correct AnswerverifiedShow Answer

Accounting software for small businesses has become so sophisticated that most small business owners will never need to consult with an actual accountant.

Correct AnswerverifiedShow Answer

Accounting transactions are very important to a firm's operations.All of the following activities would affect account balances EXCEPT:

Correct AnswerverifiedShow Answer

_________ is the systematic write-off of the value of a tangible asset over its useful life.

Correct AnswerverifiedShow Answer

An extremely high inventory turnover ratio may represent lost sales due to holding inadequate stocks of merchandise.

Correct AnswerverifiedShow Answer

What is the major problem a Canadian company faces when they look to form a joint venture globally?

Correct AnswerverifiedOne problem that oft...View AnswerShow Answer

The balance sheet reports revenues and selling costs for a period of time.

Correct AnswerverifiedShow Answer

Financial accounting is used to provide information and analysis that managers within the organization can use to assist them in decision making.

Correct AnswerverifiedShow Answer

When a firm sells merchandise from its inventory,there are different techniques used to calculate the cost of goods sold.

Correct AnswerverifiedShow Answer

At present,accounting software packages have proven to be too complex and expensive to be useful for owners of small businesses.

Correct AnswerverifiedShow Answer

The financial ratios that measure management's effectiveness in using the assets of the organization are called the ________ ratios.

Correct AnswerverifiedShow Answer

________ measures the amount of profit earned by a company for each share of outstanding common stock.

Correct AnswerverifiedShow Answer

The accounting statement that reports cash receipts and disbursements for a business is called the:

Correct AnswerverifiedShow Answer

A basic purpose of accounting is to:

Correct AnswerverifiedShow Answer

The accounting profession is divided into two main fields: bookkeeping and auditing.

Correct AnswerverifiedShow Answer

__________ is the accounting practice of recording every transaction in two places.

Correct AnswerverifiedShow Answer

How many professional accounting designations does Canada have?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
One problem that oft...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified