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Exam 17: Understanding Accounting and Financial Information

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Question 111

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A loan officer at Bigbux Bank is considering a loan application from Portable Pet Care, Inc. He is concerned about the company's ability to make payments on the loan. The loan officer is likely to be interested in Portable Pet Care's statement of cash flows.

A) True
B) False

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Question 112

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As a certified public accountant (CPA), Elizabeth might become involved in helping her clients select appropriate accounting computer software for their firm.

A) True
B) False

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Question 113

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Sophie has been a bookkeeper for a small chain of boutiques for nearly four years. Six months ago, the manager retired and a new manager was brought in. The new manager routinely asks her for information and advice about how to interpret the information she records. Sophie's experience as a bookkeeper means she is qualified to provide this type of advice.

Explain the differences between managerial and financial accounting, and give examples of the types of problems and issues examined by each of these areas of accounting.

The purpose of a trial balance is to

Which financial statement reports the company's revenues and selling costs over a period of time?

The cash a firm raised from issuing new debt or equity capital would be reported on a statement of cash flows.

Chloe is categorizing journal entries in order to post to the ________.

The accounting cycle usually involves the work of both the bookkeeper and the accountant.

The basic earnings per share and the diluted earnings per share would have quite different values for a firm that relied heavily on preferred stock and convertible debt securities to acquire funds.

Alex is responsible for recording sales transactions at Perry Enterprises. Alex's company utilizes ________, to help minimize entry errors.

The ________ is an accounting statement that reports the financial condition of a firm at a specific point in time.

Calvin works in the accounting department for a textbook publishing firm preparing budgets and reporting production costs. What job does Calvin hold?

The statement of cash flows identifies cash receipts and disbursements that result

Assets are reported on the firm's balance sheet.

Abel just graduated earned a bachelor's degree in accounting. He plans to go to work for the American Red Cross as an accountant. What job will Abel hold?

Accounting recognizes that assets, such as machinery and buildings, lose value over time. Accountants will record a portion of the cost of an asset as an expense each year through the use of

The balance sheet reports revenues and selling costs for a period of time.

The sole purpose of accounting is to help managers evaluate the financial condition of the firm so that they may make better pricing decisions.

The use of computerized accounting systems ________.