Question 1

The Revenue Canada is responsible for establishing accounting standards used by accountants working in government accounting.

Accepted Answer

A) True 
 B)False

Question 2

Owners,creditors,suppliers,employees,and the government all are users of accounting information.

Accepted Answer

A) True 
 B)False

Question 3

The use of computers in accounting has:

Accepted Answer

A)  made it possible for most firms to operate without the expense of hiring or consulting with accountants.
B)  reduced the pressure on managers in making financial decisions.
C)  allowed firms to have continuous auditing ability so that they can continuously track financial problems and quickly spot problems like cash flow difficulties.
D)  created an environment in which accounting has become nothing more than glorified bookkeeping,as all accountants are required to do is enter data into the system and monitor the results the program generates.E) A) and B)
F) All of the above

Question 4

Which financial statement represents what the company owns and owes as of a specific date?

Accepted Answer

A)  income statement
B)  balance sheet
C)  cash flow statement
D)  trial balanceE) All of the above
F) B) and D)

Question 5

FIFO and LIFO are two common:

Accepted Answer

A)  amortization strategies.
B)  ways to structure a balance sheet.
C)  inventory valuation methods.
D)  current ratios.E) None of the above
F) A) and B)

Question 6

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Accepted Answer

A)  asset disbursement.
B)  cash flow.
C)  profit and loss.
D)  inventory valuation.E) None of the above
F) C) and D)

Question 7

The basic earnings per share ratio does not take stock options,warrants,and preferred stock into account.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

One reason that generally accepted accounting principles allow firms to choose different methods for computing amortization is that amortization expenses have no effect on net income.

Accepted Answer

A) True 
 B)False

Question 10

Heather works in the accounting department of CanFar Manufacturing.Today she will summarize all the information that has been posted over the most recent period in the firm's ledgers.She wants to see if the accounts are balanced as required by the double-entry method of bookkeeping.Heather will do this by preparing a(n) :

Accepted Answer

A)  account analysis.
B)  statement of cash flows.
C)  balance sheet.
D)  trial balance.E) A) and B)
F) B) and D)

Question 11

The way accountants handle amortization could have an impact on:

Accepted Answer

A)  the value of intangible assets listed on the balance sheet.
B)  the way current ratios are computed.
C)  revenue reported on the income statement.
D)  the net income reported on the income statement.E) None of the above
F) A) and B)

Question 12

Revenue represents the dollar amount of what is received for goods sold,services rendered and from other financial sources.

Accepted Answer

A) True 
 B)False

Question 13

Financial ratios that reflect the degree to which a firm relies on borrowed funds are called the ________ ratios.

Accepted Answer

A)  leverage
B)  liquidity
C)  activity
D)  profitabilityE) All of the above
F) C) and D)

Question 14

The ability to read and understand financial statements is no longer an important skill for managers.

Accepted Answer

A) True 
 B)False

Question 15

Miko is the head of the accounting department at Microflush.She and her subordinates recently completed a trial balance.They are now likely to be working on the balance sheet,income statement and statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 16

Accounts payable are listed as an asset on a firm's balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

Accepted Answer

A) True 
 B)False

Question 18

Companies are not permitted to use amortization as an expense when calculating their income.

Accepted Answer

A) True 
 B)False

Question 19

A _________ summarizes all the data in the account ledgers to verify that they balance.

Accepted Answer

A)  ledger statement
B)  balance sheet
C)  trial balance
D)  statement of cash flowsE) A) and C)
F) C) and D)

Question 20

Cash flow difficulties are unlikely for a firm that is growing rapidly.

Accepted Answer

A) True 
 B)False

Exam 16: Understanding Accounting and Financial Information

The Revenue Canada is responsible for establishing accounting standards used by accountants working in government accounting.

Correct Answer
verified

Revenue represents the dollar amount of what is received for goods sold,services rendered and from other financial sources.

Correct Answer
verified

Cash flow difficulties are unlikely for a firm that is growing rapidly.

Correct Answer
verified

Which financial statement represents what the company owns and owes as of a specific date?

Correct Answer
verified

One reason that generally accepted accounting principles allow firms to choose different methods for computing amortization is that amortization expenses have no effect on net income.

Correct Answer
verified

Accounts payable are listed as an asset on a firm's balance sheet.

Correct Answer
verified

Miko is the head of the accounting department at Microflush.She and her subordinates recently completed a trial balance.They are now likely to be working on the balance sheet,income statement and statement of cash flows.

Correct Answer
verified

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

Correct Answer
verified

The ability to read and understand financial statements is no longer an important skill for managers.

Correct Answer
verified

The use of computers in accounting has:

Correct Answer
verified

The way accountants handle amortization could have an impact on:

Correct Answer
verified

The basic earnings per share ratio does not take stock options,warrants,and preferred stock into account.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Correct Answer
verified

Companies are not permitted to use amortization as an expense when calculating their income.

Correct Answer
verified

Owners,creditors,suppliers,employees,and the government all are users of accounting information.

Correct Answer
verified

Financial ratios that reflect the degree to which a firm relies on borrowed funds are called the ________ ratios.

Correct Answer
verified

A _________ summarizes all the data in the account ledgers to verify that they balance.

Correct Answer
verified

FIFO and LIFO are two common:

Correct Answer
verified

Exam 16: Understanding Accounting and Financial Information

The Revenue Canada is responsible for establishing accounting standards used by accountants working in government accounting.

Correct AnswerverifiedShow Answer

Revenue represents the dollar amount of what is received for goods sold,services rendered and from other financial sources.

Correct AnswerverifiedShow Answer

Cash flow difficulties are unlikely for a firm that is growing rapidly.

Correct AnswerverifiedShow Answer

Which financial statement represents what the company owns and owes as of a specific date?

Correct AnswerverifiedShow Answer

One reason that generally accepted accounting principles allow firms to choose different methods for computing amortization is that amortization expenses have no effect on net income.

Correct AnswerverifiedShow Answer

Accounts payable are listed as an asset on a firm's balance sheet.

Correct AnswerverifiedShow Answer

Miko is the head of the accounting department at Microflush.She and her subordinates recently completed a trial balance.They are now likely to be working on the balance sheet,income statement and statement of cash flows.

Correct AnswerverifiedShow Answer

There are two major financial statements prepared at the completion of the accounting cycle: the journal and the ledger.

Correct AnswerverifiedShow Answer

The ability to read and understand financial statements is no longer an important skill for managers.

Correct AnswerverifiedShow Answer

The use of computers in accounting has:

Correct AnswerverifiedShow Answer

The way accountants handle amortization could have an impact on:

Correct AnswerverifiedShow Answer

The basic earnings per share ratio does not take stock options,warrants,and preferred stock into account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cindy is concerned because during the past four months her company has experienced cash shortages.She knows if this continues,the firm will have difficulties in accomplishing its goals.Cindy is concerned with:

Correct AnswerverifiedShow Answer

Companies are not permitted to use amortization as an expense when calculating their income.

Correct AnswerverifiedShow Answer

Owners,creditors,suppliers,employees,and the government all are users of accounting information.

Correct AnswerverifiedShow Answer

Financial ratios that reflect the degree to which a firm relies on borrowed funds are called the ________ ratios.

Correct AnswerverifiedShow Answer

A _________ summarizes all the data in the account ledgers to verify that they balance.

Correct AnswerverifiedShow Answer

FIFO and LIFO are two common:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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