C213 Accounting for decision makers
1. Businesses use accounting systems to:: Analyze transactions. handle routine bookkeeping
tasks.
evaluate the performance and financial health of the business.
2. Which of the following is NOT a function of accounting?: Executing sales transactions for organizations.
3. Which of the following is NOT typically true of financial accounting informa- tion?: The information relates to
future time periods.
4. Which of the following financial statements reports the amount of cash collected and paid out by a
company?: Statement of cash flows.
5. Which of the following is NOT one of the three primary financial state- ments?: Statement of retained
earnings.
6. Which of the following financial statements reports a company's resources, obligations, and ownership?:
Balance sheet.
7. Which of the following financial statements reports the excess of a compa- ny's revenues over its expenses?:
Income statement.
8. Which of the following is NOT an external user of accounting information?-
: Management
9. The emphasis in financial accounting is to provide financial information to which of the following user
groups?: Investors and creditors.
10.The current standard setting organization for financial accounting in the United States is the: Financial
accounting standards board (FASB)
11.Which of the following is NOT true about the financial accounting stan- dards board (FASB)?: It's a
government agency.
12.Which of the following organizations has specific legal authority to estab- lish financial accounting standards
for publicly held U.S. companies?: Security and exchange commission (SEC)
13.Increased federal oversight of the audit process resulted from the passage of the following act of congress::
Sarbanes-Oxley Act.
14.Which of the following types of accounts are NOT found on the balance sheet?: Revenues.
15.The basic accounting equation is: Assets = Liabilities + Owner's Equity
16.Which of the following accounts is the most liquid?: Cash
17.Which of the following distinguishes between current and long-term as- sets?: Classified balance sheet
18.Cooper company purchased land for 90,000 in 2010. In 2013, the land is valued at 155,000. The land would
appear on the company's December 31, 2013 balance sheet at...: 90,000
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, C213 Accounting for decision makers
19.The financial statement that presents a summary of the revenues and expenses of a business for a
specific period of time, such as a year, is call a(n): Income statement
20.Which of the following statements is TRUE regarding the statement of cash flows prepared using the direct
method?: A statement of cast flows prepared under the direct method is typically easier for users to understand than a
statement of cash flows prepared under the indirect method.
21.Which of the following is an overall measure of the economic performance of business entity's activities?: Net
income (or net loss)
22.Which of the following would be included in an income statement?: Cost of goods sold
23.Expenses and revenue accounts appear on the: Income statement
24.In completing an audit of a company's financial statements, external audi- tors: Provide some assurance that
the financial statements are not misleading
25.The accuracy of the information contained in the financial statements is the respond of the: Management
26.Which of the following is an asset?: Accounts receivable.
27.Which of the following would be classified as a long term asset?: Land
28.Which of the following would be classified as a current asset?: Accounts receivable
29.Which of the following is considered a liability?: Interest payable
30.Which of the following would be classified as a current liability?: Accounts payable
31.Which of the following would be classified as a noncurrent liability?: Por- tion of mortgage payable not due
within the next 12 months.
32. Which of the following is NOT considered to be an owners equity account?-
: Gain
33.Given the following information, compute operating income:
cost of goods sold. 2,000 income taxes. 350
interest expense. 200
operating expenses. 1,500
sales. 5,500: 2,000
34.Given the following information, compute net income. cost of good sold. 2,000
income taxes. 350
interest expense. 200
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1. Businesses use accounting systems to:: Analyze transactions. handle routine bookkeeping
tasks.
evaluate the performance and financial health of the business.
2. Which of the following is NOT a function of accounting?: Executing sales transactions for organizations.
3. Which of the following is NOT typically true of financial accounting informa- tion?: The information relates to
future time periods.
4. Which of the following financial statements reports the amount of cash collected and paid out by a
company?: Statement of cash flows.
5. Which of the following is NOT one of the three primary financial state- ments?: Statement of retained
earnings.
6. Which of the following financial statements reports a company's resources, obligations, and ownership?:
Balance sheet.
7. Which of the following financial statements reports the excess of a compa- ny's revenues over its expenses?:
Income statement.
8. Which of the following is NOT an external user of accounting information?-
: Management
9. The emphasis in financial accounting is to provide financial information to which of the following user
groups?: Investors and creditors.
10.The current standard setting organization for financial accounting in the United States is the: Financial
accounting standards board (FASB)
11.Which of the following is NOT true about the financial accounting stan- dards board (FASB)?: It's a
government agency.
12.Which of the following organizations has specific legal authority to estab- lish financial accounting standards
for publicly held U.S. companies?: Security and exchange commission (SEC)
13.Increased federal oversight of the audit process resulted from the passage of the following act of congress::
Sarbanes-Oxley Act.
14.Which of the following types of accounts are NOT found on the balance sheet?: Revenues.
15.The basic accounting equation is: Assets = Liabilities + Owner's Equity
16.Which of the following accounts is the most liquid?: Cash
17.Which of the following distinguishes between current and long-term as- sets?: Classified balance sheet
18.Cooper company purchased land for 90,000 in 2010. In 2013, the land is valued at 155,000. The land would
appear on the company's December 31, 2013 balance sheet at...: 90,000
1/
9
, C213 Accounting for decision makers
19.The financial statement that presents a summary of the revenues and expenses of a business for a
specific period of time, such as a year, is call a(n): Income statement
20.Which of the following statements is TRUE regarding the statement of cash flows prepared using the direct
method?: A statement of cast flows prepared under the direct method is typically easier for users to understand than a
statement of cash flows prepared under the indirect method.
21.Which of the following is an overall measure of the economic performance of business entity's activities?: Net
income (or net loss)
22.Which of the following would be included in an income statement?: Cost of goods sold
23.Expenses and revenue accounts appear on the: Income statement
24.In completing an audit of a company's financial statements, external audi- tors: Provide some assurance that
the financial statements are not misleading
25.The accuracy of the information contained in the financial statements is the respond of the: Management
26.Which of the following is an asset?: Accounts receivable.
27.Which of the following would be classified as a long term asset?: Land
28.Which of the following would be classified as a current asset?: Accounts receivable
29.Which of the following is considered a liability?: Interest payable
30.Which of the following would be classified as a current liability?: Accounts payable
31.Which of the following would be classified as a noncurrent liability?: Por- tion of mortgage payable not due
within the next 12 months.
32. Which of the following is NOT considered to be an owners equity account?-
: Gain
33.Given the following information, compute operating income:
cost of goods sold. 2,000 income taxes. 350
interest expense. 200
operating expenses. 1,500
sales. 5,500: 2,000
34.Given the following information, compute net income. cost of good sold. 2,000
income taxes. 350
interest expense. 200
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