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Exam 17: Understanding Accounting and Financial Information

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Question 171

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Accounting is an easy subject for people to understand because almost everyone is exposed to basic accounting concepts in their everyday life.

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Question 172

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As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information from its Balance Sheet: Peak Performance's current ratio is:

A) 1.0.
B) 1.5.
C) 2.5.
D) 3.0.

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Question 173

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The work of a certified management accountant is intended to enable people outside of the organization to make investment decisions.

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

Carole Grand and Bonnie Lamore run a shuttle service from Western Illinois to the busy Chicago O'Hare airport.Last month,they recorded the following: Carole and Bonnie's gross profit for the past month was:

Net income before taxes is found by deducting total operating expenses from gross profit.

Sales receipts,purchase orders,and payroll records are all examples of accounting transactions that would be recorded by a(n) :

The higher the risk of a particular investment,the greater the expected rate of return required by investors.

A major part of a bookkeeper's job is to interpret financial data and suggest strategies for improving the firm.

The accounting cycle is a six-step procedure that results in the preparation and analysis of major financial statements.

The books where accounting data are first entered are called ledgers.

Independent audits are prepared by accountants within the organization to ensure that proper accounting procedures are followed.

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

Liquidity ratios are of particular importance to stockholders,but have little relevance for creditors.

The __________ sets accounting standards used in government accounting.

Jim works in the accounting department at the Kansas Sunflower Corporation,where it is his job to record all transactions into journals.After completing this task,the next step in the accounting process is to:

Which of the following is a key step in the accounting cycle?

The statement of cash flows calculates cash flows from operations,investing activities,and financing activities.

Thoroughly describe each of six parts of the accounting cycle.

The accounting book or computer program where each day's transactions are first recorded is called a: