Jim Hopson is an accountant who works for a number of businesses as a consultant. He has helped to design an accounting system, provides accounting services, and has analyzed the financial strength of many of his clients. Jim is working as a: |
c |
This legislation created new government reporting standards for publicly traded companies. |
a |
If Beck’s Bicycles, Inc.’s income statement shows gross profit of $350 million, with operating expenses of $120 million, and if Beck’s tax rate is 30%, what is the firm’s net income after taxes? |
b |
Which of the following assets would be considered to be the most liquid (able to convert easily to cash) assets? a) Intangible assets b) Current assets c) Long-term assets d) Fixed assets |
b |
The primary purpose of accounting is to: |
c |
Buying and selling goods, acquiring insurance and using supplies represent __________ transactions. |
c |
__________ accounting is used to provide information and analysis to managers within the firm to assist them in decision making. |
d |
Small businesses that are just getting off the ground often have problems with the difference between cash coming into the business and cash going out of the business. For example, if the company allows far too lenient credit sales terms, customers do not pay on time, which could cause cash to come in too slowly. That’s why all businesses must keep a careful watch on their ________. a) advance payments accounts b) asset summarization c) recording processes d) cash flow |
d |
The fundamental accounting equation is ________. a) assets = liabilities + owner’s equity b) owners’ earnings = assets – revenues c) assets = liabilities – owner’s earnings d) liabilities = owners’ equity + revenues |
a |
If you were working as a bookkeeper, the first action you would take is to: |
d |
In a private company’s accounting system, inputs are _______________ and outputs are _________. |
a |
A specialized accounting book in which information is accumulated into specific categories and posted so managers can find all information about one account in the same place is a: |
c |
In order for information to be meaningful, a firm’s accounting processes and procedures should be certified as accurate by acceptable accounting standards. Companies hire ________ to provide unbiased opinions about the accuracy of a firm’s financial statements. |
d |
A debt to equity ratio of over 100% would mean: |
a |
Which of the following is most helpful in analyzing the financial performance of a company? a) The trial balance b) Financial ratios c) The customer base payments schedule d) General ledger statements |
b |
Darby’s company reported net income after taxes of $2,000,000, on sales of $225 million. Her boss asked her to calculate the earnings per share for stockholders. Darby noted that the company’s balance sheet showed 44 million shares outstanding. To explain to him that her calculation is correct, Darby’s correct response is __________. a) $5.12 per share. Earnings per share is calculated by taking the sales dollars and dividing by the number of shares issued and outstanding b) $0.45 per share. Earnings per share means sales of $225 million is divided by the number of common shares outstanding c) $4.50 per share. Earnings per share is calculated by taking the number of shares issued and outstanding and dividing by the net income after taxes d) $0.045 per share. Earnings per share is calculated by taking net income after taxes and dividing by the total number of common shares issued and outstanding |
d |
Accumulated earnings from a firm’s profitable operations that are kept in the business and not paid out to stockholders are called _____________. a) appreciated earnings b) gross revenues c) accumulated capital d) retained earnings |
d |
The accounting cycle is a six-step process that results in: |
a |
A Certified Public Accountant (CPA) is ___________ . a) basically the same as a certified management accountant, since both have passed a series of exams b) a government employee who has a degree in accounting c) a professional who has studied both personal financial management and financial accounting and passed brokerage qualification exams d) an accountant who has met educational requirements and has passed exams established by the American Institute of Certified Public Accountants |
d |
Which of the following describes an activity associated with accounting? a) Forecasting demand for a new product. b) Developing strategies for entering new markets. c) Establishing a channel of distribution and supply chain. d) Summarizing and interpreting company financial information. |
d |
Ledgers are used to compile information to complete which of the following? a) Departmental checks and balances b) A gross margin balance c) A trial balance d) A retained balance |
c |
Celia’s boss asked her to determine if their company is operating with too many borrowed funds. Which ratio will Celia utilize to help her with her decision? a) Inventory turnover b) Liquidity c) Profitability d) Leverage |
d |
The following information is listed on Beck’s Bicycles, Inc.’s balance sheet as of 12/30/2015. Fixed Assets $125,000,000.00 Long-Term Debt $75,000,0000.00
If you were one of Beck’s accountants and you were asked to evaluate if the firm has enough funds to pay its bills that are coming due in the next few months, how would you respond? |
d |
Which of the following would be considered a current asset? a) Accounts payable b) Copyrights c) Buildings d) Accounts receivable |
d |
Which of the following is true of the use of computers in accounting? |
a |
GEB Chapter 17
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