Accounting for decision makers C213 | Questions and Answers
Answers Questions
The impact a business's activities What does accounting focus on?
have on its overall financial
performance
Which report summarizes cash collections and cash expenditures
Statement of cash flows
from operating, investing, and financing activities over a period
of time?
Which users would have a primary concern with an organization's
Employees
ability to provide healthcare benefits?
An increase in its compatibility to Which benefit does a corporation gain by following Generally
other companies Accepted Accounting Principles (GAPP)?
The Public Company Which body regulates a certified public accounting firm's audit
Accounting Oversight practices when the firm is auditing a large publicly traded
Board (PACOB) company?
Information technology What has had the most significant impact on Accounting practices?
Ownership and Debt What two items of information are revealed on the balance sheet?
Owners equity Which term is defined as the residual in the net assets of a company?
In 2014, a company provides Which situation should result in revenue recognition on the income
services to a customer for which statement for the year ending 12/31/14 if the firm is using accrual
cash will be collected the next accounting?
year (2015).
Which category on the statement of cash flows summarizes cash
Cash from financing activities
receipts and payments to owners and creditors of the
company?
Where would an investor find a summary of a company's significant
In the notes to financial statements
accounting policies?
The company's financial statements Which assurance does an external audit report provide for its readers?
fairly reflect its financial position
Reliable Information that can be verified
, Relevant Information having to do with the matter at hand
Material Information that is important enough to make a difference
Conservatism Information related to recognizing losses as they occur
What is consistent with a continual decline in gross profit if the
Continual decrease in sales
firm's cost of goods sold remains the same?
Notes payable expected to be paid Which form of debt should be reported in the long-term liability category?
in 18 months
Operating expenses & Which values affect the measurement of net income?
Ordinary gains and losses
Gross profit & Which items' subtotals are included in a multi-step income statement?
Income from operations
Cash from investing activities What is a common category in a statement of cash flows?
Cash from financing activities Which cash flow category would include "cash received from investors"?
Cash payments for purchase of Which item is an investing activity?
plant assets
Increase in cash from investing What impact does the sale of equipment have on the statement of cash flows?
activities
The indirect method is more What is known about the direct and indirect methods of preparing
popular among large U.S. statements of cash flow?
companies
The inventory department counts Which internal control is intended to ensure that a company does
and inspects items as received and not mistakenly pay a supplier for an invoice that includes more
forwards the receiving record to items than were actually received?
accounts payable.
Pressure to meet internal sales What are common reasons for managers to manipulate reported earnings?
goals & Preparing to qualify for a
bank loan
Firms must not provide certain Which requirements must accounting firms that audit public
non-audit services to audit companies meet under the Sarbanes-Oxley Act?
clients, such as management
functions or legal services. & Firms
must report to and be retained by
the audit committee rather than
the CFO or other company
management.
They search for and Which actions do internal auditors perform to assist in maintaining
investigate fraud. & the integrity of financial statements?
They review financial records and
internal controls.
Answers Questions
The impact a business's activities What does accounting focus on?
have on its overall financial
performance
Which report summarizes cash collections and cash expenditures
Statement of cash flows
from operating, investing, and financing activities over a period
of time?
Which users would have a primary concern with an organization's
Employees
ability to provide healthcare benefits?
An increase in its compatibility to Which benefit does a corporation gain by following Generally
other companies Accepted Accounting Principles (GAPP)?
The Public Company Which body regulates a certified public accounting firm's audit
Accounting Oversight practices when the firm is auditing a large publicly traded
Board (PACOB) company?
Information technology What has had the most significant impact on Accounting practices?
Ownership and Debt What two items of information are revealed on the balance sheet?
Owners equity Which term is defined as the residual in the net assets of a company?
In 2014, a company provides Which situation should result in revenue recognition on the income
services to a customer for which statement for the year ending 12/31/14 if the firm is using accrual
cash will be collected the next accounting?
year (2015).
Which category on the statement of cash flows summarizes cash
Cash from financing activities
receipts and payments to owners and creditors of the
company?
Where would an investor find a summary of a company's significant
In the notes to financial statements
accounting policies?
The company's financial statements Which assurance does an external audit report provide for its readers?
fairly reflect its financial position
Reliable Information that can be verified
, Relevant Information having to do with the matter at hand
Material Information that is important enough to make a difference
Conservatism Information related to recognizing losses as they occur
What is consistent with a continual decline in gross profit if the
Continual decrease in sales
firm's cost of goods sold remains the same?
Notes payable expected to be paid Which form of debt should be reported in the long-term liability category?
in 18 months
Operating expenses & Which values affect the measurement of net income?
Ordinary gains and losses
Gross profit & Which items' subtotals are included in a multi-step income statement?
Income from operations
Cash from investing activities What is a common category in a statement of cash flows?
Cash from financing activities Which cash flow category would include "cash received from investors"?
Cash payments for purchase of Which item is an investing activity?
plant assets
Increase in cash from investing What impact does the sale of equipment have on the statement of cash flows?
activities
The indirect method is more What is known about the direct and indirect methods of preparing
popular among large U.S. statements of cash flow?
companies
The inventory department counts Which internal control is intended to ensure that a company does
and inspects items as received and not mistakenly pay a supplier for an invoice that includes more
forwards the receiving record to items than were actually received?
accounts payable.
Pressure to meet internal sales What are common reasons for managers to manipulate reported earnings?
goals & Preparing to qualify for a
bank loan
Firms must not provide certain Which requirements must accounting firms that audit public
non-audit services to audit companies meet under the Sarbanes-Oxley Act?
clients, such as management
functions or legal services. & Firms
must report to and be retained by
the audit committee rather than
the CFO or other company
management.
They search for and Which actions do internal auditors perform to assist in maintaining
investigate fraud. & the integrity of financial statements?
They review financial records and
internal controls.
