Deck 15: Using Management and Accounting Information

Question 1

For a manager or employee, information and data mean the same thing.

Answer 1

False

Question 2

Financial accounting provides managers and employees within the organization with the information needed to make decisions about a firm's financing, investing, marketing, and operating activities.

Answer 2

False

Question 3

A computer program that uses artificial intelligence to imitate a human's ability to think is a(n)

A) decision-support system (DSS).
B) expert system.
C) GAAP.
D) database.
E) management information system (MIS).

Answer 3

expert system.

Question 4

Cash, inventory, and equipment are listed as __________ on a firm's balance sheet.

A) revenues
B) expenses
C) assets
D) liabilities
E) owners' equity

Question 5

Assets that can be converted quickly into cash or that will be used in one year or less are

A) intangible assets.
B) current assets.
C) owners' equity.
D) current liabilities.
E) revenues.

Question 6

Beginning inventory + net purchases - ending inventory =

A) gross sales.
B) operating expenses.
C) cost of goods sold.
D) net profit before taxes.
E) gross expenses.

Question 7

Which of the following ratios measures how effectively a firm is transforming sales into profits?

A) Return on sales
B) Return on owners' equity
C) Acid-test
D) Current turnover
E) Earnings per share

Question 8

As a result of the Sarbanes-Oxley Act, the FDIC is responsible for establishing a full-time federal oversight board that will police the accounting industry.

Question 9

A database is a single collection of data and information stored in one place that can be accessed by people throughout a firm to make business decisions.

Question 10

Based on the accounting equation, owners' equity is the difference between total assets and total liabilities.

Question 11

The values of copyrights, patents, and goodwill are reported on a firm's balance sheet as intangible assets.

Question 12

Because of GAAPs, it is possible to compare accounting data for one firm with accounting data for competing firms.

Question 13

If assets total $125,000 and owners' equity totals $75,000, how much are the firm's liabilities?

A) $200,000
B) $125,000
C) $75,000
D) $50,000
E) $0

Question 14

Which of the following types of accounts would not be listed on a firm's balance sheet?

A) Current liabilities
B) Current assets
C) Operating expenses
D) Fixed assets
E) Intangible assets

Question 15

Revenues - cost of goods sold - expenses =

A) fixed assets.
B) owners' equity.
C) net sales.
D) gross profit.
E) net income before taxes.

Question 16

The ratio computed by dividing cost of goods sold by the average value of inventory is

A) return on owners' equity.
B) return on sales.
C) liabilities turnover.
D) current ratio.
E) inventory turnover.

Question 17

Balance It!*
Match the following words/numbers with the blanks in the balance sheet on the next page. (Ignore upper- and lower-case spellings and whether numbers are shown as currency or not.)
____ Equity
____ Receivable
____ Accounts
____ Common
____ Accumulated
____ Fixed
____ Payable
____ Less
____ Total
____ Intangible
____ Current
____ Notes
____ Long-term
____ Assets
____ Doubtful
____ 142,000
____ 18,000
____ 25,000
____ 62,000
____ 32,000