Question 1

An automobile manufacturer purchases a piece of new equipment for the factory using cash. The equipment is considered which of the following on the balance sheet?

Accepted Answer

A)   an asset
B)   owner's equity
C)   inventory
D)   a short-term investmentE) None of the above
F) All of the above

Question 2

Which of the following presents assets in the correct balance sheet order?

Accepted Answer

A)   marketable securities, equipment, prepaid insurance, inventory
B)   cash, inventory, equipment
C)   accounts receivable, buildings, inventory, land
D)   buildings, prepaid expenses, inventory, equipmentE) None of the above
F) A) and B)

Question 3

Angela has a small bed and breakfast (B&B)  in a lakeside resort town. If she listed all of the B&B's assets on the balance sheet, which of the following assets would be listed last?

Accepted Answer

A)   furniture and appliances
B)   cleaning equipment and supplies
C)   office equipment and supplies
D)   buildingE) A) and B)
F) All of the above

Question 4

If the assets for your small business are $22,349 and your liabilities are $6,825, what is the owner's equity?

Accepted Answer

A)   $14,128
B)   $15,524
C)   $29,174
D)   $16,394E) A) and C)
F) C) and D)

Question 5

Which financial statement is characterized as revenues - cost of goods sold - expenses = net income?

Accepted Answer

A)   balance sheet
B)   statement of cash flows
C)   statement of financial position
D)   income statementE) All of the above
F) B) and D)

Question 6

As the marketing manager for a yoga studio, you need to know how much you've spent on marketing this year. Which of the following can you use to access a report that will provide this information?

Accepted Answer

A)   sales data
B)   the income statement
C)   financial accounting
D)   managerial accountingE) None of the above
F) A) and C)

Question 7

Which report is NOT a financial statement?

Accepted Answer

A)   income statement
B)   tax return
C)   balance sheet
D)   statement of cash flowsE) None of the above
F) All of the above

Question 8

What are the debts owed by a business called?

Accepted Answer

A)   assets
B)   owners' equity
C)   liabilities
D)   revenuesE) None of the above
F) A) and D)

Question 9

Which of the following assets is the most liquid?

Accepted Answer

A)   accounts receivable
B)   marketable securities
C)   cash
D)   capitalE) None of the above
F) A) and D)

Question 10

Which of the following is true?

Accepted Answer

A)   Comparing both the income statements and the balance sheets shows that SportsAde is the better choice to invest money in.
B)   Based on the income statements, SportsAde is in a better financial position and you should purchase its stock.
C)   Based on the balance sheets, SweetFeet is in a better financial position and you should purchase its stock.
D)   It is necessary to compare both the income statement and the balance sheet to get an accurate picture of the financial health of each company.E) A) and B)
F) All of the above

Question 11

The owner of a jewellery store calculates which of the following by adding up her rent, salary, electricity and phone payments?

Accepted Answer

A)   cost of goods sold
B)   operating expenses
C)   gross profit
D)   revenueE) A) and B)
F) B) and D)

Question 12

Which of the following is a leverage ratio?

Accepted Answer

A)   inventory turnover ratio
B)   return on sales
C)   debt-to-equity ratio
D)   acid-test ratioE) B) and C)
F) A) and D)

Question 13

All of the following are current assets EXCEPT which one?

Accepted Answer

A)   office equipment
B)   cash
C)   prepaid insurance
D)   accounts receivableE) A) and B)
F) C) and D)

Question 14

Which of the following is the process of systematically collecting, analyzing, and reporting financial information?

Accepted Answer

A)   accounting
B)   bookkeeping
C)   auditing
D)   financial reportingE) B) and C)
F) C) and D)

Question 15

A small candy company is required to make quarterly payments of withholding taxes to the federal government. What are the upcoming payments called?

Accepted Answer

A)   accounts payable
B)   accounts receivable
C)   loans payable
D)   accrued expensesE) A) and C)
F) All of the above

Question 16

All of the following are acceptable ways of stating the accounting equation EXCEPT which one?

Accepted Answer

A)   owners' equity = assets - liabilities
B)   assets = liabilities + owners' equity
C)   owners' equity - liabilities = assets
D)   assets - liabilities = owners' equityE) A) and C)
F) C) and D)

Question 17

If total liabilities were subtracted from total assets, what would be the residual value?

Accepted Answer

A)   revenues
B)   owners' equity
C)   working capital
D)   expensesE) A) and B)
F) B) and C)

Question 18

Which of the following is the term for resources that a firm owns?

Accepted Answer

A)   revenues
B)   owner's equities
C)   assets
D)   expensesE) All of the above
F) C) and D)

Question 19

The statement of cash flows offers information on all of the following EXCEPT which one?

Accepted Answer

A)   available cash to pay a company's bills
B)   expenses during a particular accounting period
C)   the company's use of cash during the reporting period
D)   sources of the company's cash during the reporting periodE) B) and C)
F) None of the above

Question 20

Suppose a local catering company owes $15,000 on a van it uses for deliveries. The owner's equity is $72,000. What must the value be of the company's owner's equity?

Accepted Answer

A)   $75,000
B)   $87,000
C)   $57,000
D)   $43,000E) A) and B)
F) All of the above

Exam 17: Using Accounting and Financial Information

What are the debts owed by a business called?

Correct AnswerverifiedShow Answer

The owner of a jewellery store calculates which of the following by adding up her rent, salary, electricity and phone payments?

Correct AnswerverifiedShow Answer

Angela has a small bed and breakfast (B&B) in a lakeside resort town. If she listed all of the B&B's assets on the balance sheet, which of the following assets would be listed last?

Correct AnswerverifiedShow Answer

Which report is NOT a financial statement?

Correct AnswerverifiedShow Answer

If total liabilities were subtracted from total assets, what would be the residual value?

Correct AnswerverifiedShow Answer

As the marketing manager for a yoga studio, you need to know how much you've spent on marketing this year. Which of the following can you use to access a report that will provide this information?

Correct AnswerverifiedShow Answer

Which of the following presents assets in the correct balance sheet order?

Correct AnswerverifiedShow Answer

Which of the following is the process of systematically collecting, analyzing, and reporting financial information?

Correct AnswerverifiedShow Answer

All of the following are current assets EXCEPT which one?

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

The statement of cash flows offers information on all of the following EXCEPT which one?

Correct AnswerverifiedShow Answer

Which financial statement is characterized as revenues - cost of goods sold - expenses = net income?

Correct AnswerverifiedShow Answer

If the assets for your small business are $22,349 and your liabilities are $6,825, what is the owner's equity?

Correct AnswerverifiedShow Answer

Suppose a local catering company owes $15,000 on a van it uses for deliveries. The owner's equity is $72,000. What must the value be of the company's owner's equity?

Correct AnswerverifiedShow Answer

Which of the following is a leverage ratio?

Correct AnswerverifiedShow Answer

Which of the following assets is the most liquid?

Correct AnswerverifiedShow Answer

All of the following are acceptable ways of stating the accounting equation EXCEPT which one?

Correct AnswerverifiedShow Answer

A small candy company is required to make quarterly payments of withholding taxes to the federal government. What are the upcoming payments called?

Correct AnswerverifiedShow Answer

An automobile manufacturer purchases a piece of new equipment for the factory using cash. The equipment is considered which of the following on the balance sheet?

Correct AnswerverifiedShow Answer

Which of the following is the term for resources that a firm owns?

Correct AnswerverifiedShow Answer

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