Question 1

Financial statements that do not include interpretation and explanation by management are in violation of which GAAP principle?

Accepted Answer

A)   Principle of sincerity
B)   Principle of continuity
C)   Principle of full disclosure
D)   Principle of regularity
E)   Principle of prudence

Question 2

Which of the following are the three categories on a company's cash flow statement?

Accepted Answer

A)   Operating activities, purchase activities, taxes
B)   Profit inflow, debt outflow, taxes
C)   Profitable activities, deficit activities, taxes
D)   Operating activities, investing activities, taxes
E)   Operating activities, investing activities, financing activities

Question 3

Which of the following ratios evaluates management's use of resources?

Accepted Answer

A)   Short-term solvency ratio
B)   Long-term solvency ratio
C)   Activity ratio
D)   Profitability ratio
E)   Equity ratio

Question 4

One of the purposes of ethics in accounting is to maintain public confidence in business institutions, financial markets, and the products and services of the accounting profession.

Accepted Answer

A) True 
 B)False

Question 5

What is the term for the amount a firm will pay shareholders, based on the size of their investment in the company?

Accepted Answer

A)   Leverage per share
B)   Earnings per share
C)   Solvency return
D)   Current ration return
E)   Profitability ratio

Question 6

Which of the following terms refers to any economic resource that is expected to benefit a firm or individual who owns it?

Accepted Answer

A)   Asset
B)   Liability
C)   Equity
D)   Account
E)   Deposit

Question 7

What is the International Accounting Standards Board?

Accepted Answer

Established in 2001 and housed at London...

Question 8

Those accountants who are hired by firms as salaried employees, and who specialize in areas such as financial planning, internal auditing, and taxation are called

Accepted Answer

A)   forensic accountants.
B)   certified management accountants.
C)   private accountants.
D)   certified public accountants.
E)   fraud examiners.

Question 9

What is the statement of cash flow required by the SEC and why is it required?

Accepted Answer

Some companies prepare only balance shee...

Question 10

Discuss the fair value discloser standard that is being jointly developed by the FASB and the IASB.

Accepted Answer

In fair value disclosure, the FASB and I...

Question 11

Which of the following terms refers to the recording of financial transactions?

Accepted Answer

A)   Bookkeeping
B)   Accounting
C)   Controlling
D)   Budgeting
E)   Auditing

Question 12

Which organization provides guidelines for ethical conduct for the accounting profession?

Accepted Answer

A)   AICPA
B)   SEC
C)   GAAP
D)   FASB
E)   CMA

Question 13

Why is the long-term solvency ratio important for stakeholders?

Accepted Answer

A)   It may indicate excessive inventories that cannot be sold.
B)   It indicates the earnings per share a stakeholder can expect to receive.
C)   It indicates the efficiency with which a firm uses resources.
D)   It indicates the firm's ability to generate cash.
E)   It may indicate collapse or takeover opportunities.

Question 14

Which of the following describes assets such as patents and trademarks?

Accepted Answer

A)   Liquid assets
B)   Fixed assets
C)   Intangible assets
D)   Current assets
E)   Limited assets

Question 15

A long-term ratio of 2:3 indicates that the company has more equity than debt by a half.

Accepted Answer

A) True 
 B)False

Question 16

Unethical accounting methods fortunately have only affected public confidence only in the company found to have committed accounting violations.

Accepted Answer

A) True 
 B)False

Question 17

What is the goal of the CPA Vision Project?

Accepted Answer

A)   To eradicate fraud in public companies
B)   To increase the role of CPAs in providing consulting services to corporate managers
C)   To better identify core competencies needed for noncertified public accountants in the public sector
D)   To better define the role of accountants in the world economy
E)   To lobby for laws that better support the accounting field and eliminate fraud

Question 18

Which are the two major fields of accounting?

Accepted Answer

A)   Managerial and forensic
B)   Financial and managerial
C)   Bookkeeping and advisory
D)   Corporate and individual
E)   Public and private

Question 19

Discuss the role of a private accountant within large and small firms.

Accepted Answer

Private accountants perform day-to-day a...

Question 20

What two sources of capital make up owners' equity?

Accepted Answer

Owners' equity includes the amount that ...

Exam 15: The Role of Accountants and Accounting Information

A long-term ratio of 2:3 indicates that the company has more equity than debt by a half.

Correct AnswerverifiedShow Answer

Which of the following terms refers to any economic resource that is expected to benefit a firm or individual who owns it?

Correct AnswerverifiedShow Answer

Which of the following describes assets such as patents and trademarks?

Correct AnswerverifiedShow Answer

Those accountants who are hired by firms as salaried employees, and who specialize in areas such as financial planning, internal auditing, and taxation are called

Correct AnswerverifiedShow Answer

What two sources of capital make up owners' equity?

Correct AnswerverifiedOwners' equity includes the amount that ...View AnswerShow Answer

Unethical accounting methods fortunately have only affected public confidence only in the company found to have committed accounting violations.

Correct AnswerverifiedShow Answer

One of the purposes of ethics in accounting is to maintain public confidence in business institutions, financial markets, and the products and services of the accounting profession.

Correct AnswerverifiedShow Answer

Financial statements that do not include interpretation and explanation by management are in violation of which GAAP principle?

Correct AnswerverifiedShow Answer

Which of the following ratios evaluates management's use of resources?

Correct AnswerverifiedShow Answer

What is the International Accounting Standards Board?

Correct AnswerverifiedEstablished in 2001 and housed at London...View AnswerShow Answer

Which are the two major fields of accounting?

Correct AnswerverifiedShow Answer

Which of the following terms refers to the recording of financial transactions?

Correct AnswerverifiedShow Answer

What is the statement of cash flow required by the SEC and why is it required?

Correct AnswerverifiedSome companies prepare only balance shee...View AnswerShow Answer

Discuss the fair value discloser standard that is being jointly developed by the FASB and the IASB.

Correct AnswerverifiedIn fair value disclosure, the FASB and I...View AnswerShow Answer

Which organization provides guidelines for ethical conduct for the accounting profession?

Correct AnswerverifiedShow Answer

What is the goal of the CPA Vision Project?

Correct AnswerverifiedShow Answer

Which of the following are the three categories on a company's cash flow statement?

Correct AnswerverifiedShow Answer

Discuss the role of a private accountant within large and small firms.

Correct AnswerverifiedPrivate accountants perform day-to-day a...View AnswerShow Answer

What is the term for the amount a firm will pay shareholders, based on the size of their investment in the company?

Correct AnswerverifiedShow Answer

Why is the long-term solvency ratio important for stakeholders?

Correct AnswerverifiedShow Answer

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Owners' equity includes the amount that ...
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Established in 2001 and housed at London...
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Some companies prepare only balance shee...
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In fair value disclosure, the FASB and I...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Private accountants perform day-to-day a...
View Answer

Correct Answer
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Correct Answer
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