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Exam 17: Using Management and Accounting Information

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Question 41

Multiple Choice

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All of the following are acceptable ways of stating the accounting equation except

A) owners' equity = assets ― liabilities.
B) assets = liabilities + owners' equity.
C) owners' equity ― liabilities = assets.
D) assets ― liabilities = owners' equity.
E) assets = shareholders' equity + liabilities.

F) None of the above
G) A) and E)

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Question 42

Multiple Choice

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Ridgley, Cooper, and Ross (RCR) Katie is the CEO of Ridgley, Cooper, and Ross (RCR) , a regional accounting firm. RCR offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, RCR could be considered a violator of the Sarbanes-Oxley Act. Katie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained. -Refer to Ridgley, Cooper, and Ross. If you applied for a job at RCR and were asked to state the accounting equation, which of these would you state?

A) Assets = liabilities ― owners' equity
B) Assets + liabilities = owners' equity.
C) Assets ― liabilities = owners' equity
D) Assets = liabilities + owners' equity,
E) Assets = liabilities ― owners' equity.,

F) A) and E)
G) A) and D)

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Question 43

Multiple Choice

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After the Sarbanes-Oxley Act was signed by the president, auditors and accountants can be imprisoned for up to ____ years for destroying financial documents and willful violations of the securities laws.

Cash, marketable securities, notes receivable, and merchandise inventory are examples of

Marilyn provides piano lessons to students in her home four days a week. The money she earns from providing these services would be called ____ on an income statement.

Debts that are to be repaid in two years are referred to as

The first section of a business report is the recommendations.

A public corporation must change its lead auditing firm

A measure that summarizes a particular characteristic of a group of numbers is called a(n)

Multinational corporations do not have the responsibility or the incentive to follow international accounting standards as there still is no particular set of global standards that are generally accepted worldwide.

The average value of inventory can be found by adding beginning inventory and the ending inventory and dividing the sum by 2.

The financial statement that provides information about a firm's operating, investing, and financing activities during an accounting period is the

What ratio is used to measure a firm's ability to pay its debts? How is it calculated and what does the calculation tell a manager? How can a low ratio be changed?

Information rules emerge when business research confirms the same results each time it studies the same or a similar set of circumstances.

Trademarks and goodwill are both

Data that are presented in a form that is useful for a specific purpose are called information.

APSCO Lighting, Inc., had a gross profit of $234,000 for the last twelve-month period. Operating expenses were $185,000. What was APSCO's net income before taxes?

Ridgley, Cooper, and Ross (RCR) Katie is the CEO of Ridgley, Cooper, and Ross (RCR) , a regional accounting firm. RCR offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, RCR could be considered a violator of the Sarbanes-Oxley Act. Katie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained. -Refer to Ridgley, Cooper, and Ross. In order to be successful in the accounting industry, RCR employees must

When Betty Tran prepared a personal income statement, the remainder or residual value is called

From an executive's viewpoint, which of the following statements does not describe an executive's motivation to "cook" a firm's books?