Question 1

A(n)___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

Accepted Answer

An independent audit is conducted by an external auditor who provides an unbiased opinion on the accuracy of a company's financial statements. Internal audits are conducted by the company's own employees and may not be completely unbiased. An annual report is a document prepared by the company to provide information about its performance and financial results, but it may not necessarily contain an audit opinion. Certified audit is not a term commonly used in accounting or auditing.

Question 2

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n)________ performed.

Accepted Answer

An independent audit would be the best option to identify irregularities in the accounting system of Sasha Deal Company. An independent audit is an examination of the company's financial statements and records performed by an outside auditor who is not affiliated with the company. This type of audit provides an objective and unbiased assessment of the company's accounting practices and can identify any discrepancies or fraudulent activities.

Question 3

As Canadian firms focus on cutting costs in order to stay competitive with producers in low-wage countries,________ will gain importance.

Accepted Answer

Managerial accounting involves analyzing and providing data for internal decision making, including cost analysis and budgeting. As Canadian firms focus on reducing costs to compete with low-wage countries, they will need to rely more heavily on managerial accounting to make informed decisions on where to cut costs and optimize their operations.

Question 4

The review and evaluation of the records of a firm that are used to prepare the organization's financial statements is referred to as _____.

Accepted Answer

The answer of The review and evaluation of the records...

Question 5

A(n)_________ is a yearly statement of the financial condition,progress and expectations of an organization.

Accepted Answer

An annual report is a yearly statement of the financial condition, progress, and expectations of an organization. A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time. An independent audit is an evaluation of an organization's financial records and processes by an outside auditor. A mission statement is a declaration of an organization's purpose and values.

Question 6

__________ is the accounting practice of recording every transaction in two places.

Accepted Answer

Double-entry bookkeeping requires that every transaction be recorded in at least two accounts, ensuring accuracy and completeness of financial records. This practice is widely used in modern accounting systems to maintain proper checks and balances on financial reporting.

Question 7

The preparation of financial statements for people outside the firm (creditors,unions,suppliers,and others)is the goal of:

Accepted Answer

Financial accounting is focused on providing financial information for external stakeholders, such as creditors, unions, suppliers, and others, and preparing financial statements is one of its primary goals. Auditing focuses on providing assurance services related to financial statements, while managerial accounting is focused on providing financial information for internal decision-making. Cost accounting is focused on calculating and analyzing the costs of producing goods or services within a firm.

Question 8

Which key provision of the Sarbanes-Oxley act should minimize the opportunity for public accountants to minimize conflict of interest?

Accepted Answer

The key provision of the Sarbanes-Oxley act that minimizes the opportunity for public accountants to minimize conflict of interest is the prohibition on accounting firms providing consulting services and auditing the same firm. This helps to avoid situations where the accounting firm has a vested interest in the success of their consulting client, which could compromise the independence and objectivity of their audit work.

Question 9

A bookkeeper's first task is to:

Accepted Answer

A bookkeeper's first task is to divide all of the firm's transactions into meaningful categories, which is part of the process of recording financial transactions.

Question 10

For the last several years Bill Havers has gone to accountant Chelsea Jones for help in preparing his personal income tax forms.He heard about Chelsea from his boss,who said she had done a good job helping the business design a new accounting system.Bill has been happy with Chelsea's work and feels that the fees she charges are quite reasonable.Chelsea would be classified as a(n)

Accepted Answer

Chelsea is a public accountant because she provides accounting services to individuals and businesses, including preparing personal income tax forms for clients like Bill.

Question 11

Jill wants to start her own business,but knows little about how to set up an accounting system or interpret financial information."I'm not worried about accounting",she tells her friends."I'll just hire a part-time bookkeeper to handle all that type of stuff,and focus my attention on what I like-finding ways to satisfy my customers".Which of the following is the best response to Jill's comments?

Accepted Answer

Although Jill can hire a bookkeeper to handle the day-to-day accounting tasks, as a business owner, she still needs to have a basic understanding of accounting reports to make informed decisions. Relying solely on a bookkeeper can be risky and result in missed opportunities or financial mismanagement.

Question 12

The individuals in a firm that are responsible for the development of strategies to minimize taxes are called:

Accepted Answer

Tax accountants are specifically trained to develop strategies to minimize taxes for their clients. Certified public accountants, certified management accountants, and certified internal auditors may also have some knowledge of tax strategy, but it is not their primary focus.

Question 13

Jose just graduated from college with a bachelor's degree in accounting.He plans to go to work for the Canadian Cancer Society as an accountant.Jose will be a(n):

Accepted Answer

Jose will be working for a specific organization, the Canadian Cancer Society, as their accountant. Therefore, he will be a private accountant rather than a public accountant who would work for multiple clients at a public accounting firm. Forensic accounting involves investigating financial crimes or discrepancies, which does not apply in this scenario. Independent accounting refers to self-employed individuals rather than those working for a specific organization.

Question 14

Leondra works for a textbook publishing firm preparing budgets and reporting production costs.She works in the field of:

Accepted Answer

Leondra's job responsibilities of preparing budgets and reporting production costs align with the field of managerial accounting, which involves providing financial information to internal users (such as managers) to support decision-making and planning. Financial accounting, on the other hand, focuses on preparing financial statements for external users (such as investors and creditors). Tax accounting involves preparing tax returns and ensuring compliance with tax laws, while auditing involves examining and verifying financial records for accuracy and compliance.

Question 15

Taylor Casual,a chain of retail clothing stores,wants to assure investors and other outsiders that its financial statements are accurate.One way to do so would be to hire a public accounting firm to:

Accepted Answer

The best choice would be for Taylor Casual to hire a public accounting firm to perform an independent audit. An independent audit is an objective examination and evaluation of the financial statements of an organization. This would provide assurance to investors and other outsiders that the financial statements are accurate and free from material misstatements.

Question 16

The area of accounting that provides managers of an organization with information they need to make decisions is called:

Accepted Answer

Managerial accounting focuses on providing internal decision-makers, such as managers and executives, with the financial information they need to make informed decisions about the organization. This includes data on costs, budgets, performance measures, and forecasting. Tax accounting, financial accounting, and informational accounting may also provide data for decision-making, but their primary focuses are on tax compliance, financial reporting for external stakeholders, and gathering and analyzing data for various purposes, respectively.

Question 17

_________ involves the recording of business transactions.

Accepted Answer

Bookkeeping involves the systematic recording, storing, and retrieving of financial transactions of a company or an individual. It is the cornerstone of accounting and provides the necessary data for financial statements production and auditing. Marketing is a process of promoting and selling products or services to potential customers, economics is a social science that studies the production, distribution, and consumption of goods and services, and auditing is the examination of financial records by an independent third-party entity.

Question 18

The accounting profession is divided into five key working areas,two of which are:

Accepted Answer

The accounting profession is typically divided into five key working areas, including auditing and managerial accounting. Auditing involves verifying financial records to ensure accuracy, while managerial accounting involves gathering and analyzing financial information to help organizations make strategic decisions. Therefore, choice A is the best answer as it accurately identifies two of the key working areas within the accounting profession.

Question 19

How many professional accounting designations does Canada have?

Accepted Answer

Canada has three professional accounting designations - Chartered Professional Accountant (CPA), Certified General Accountant (CGA) and Certified Management Accountant (CMA). However, these three designations were merged in 2013 to form the CPA designation, which is the only recognized professional accounting designation in Canada.

Question 20

The specialized accounting book in which information from journals is accumulated into specific categories is called a:

Accepted Answer

The specialized accounting book in which information from journals is accumulated into specific categories is called a ledger. A journal is where the initial recording of transactions occurs, a trial balance is a list of all the accounts and their balances to ensure they balance out, and a balance sheet is a financial statement that shows a company's financial position at a specific point in time.

Quiz 16: Understanding Accounting and Financial Information

A(n) ___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

Stockholders of the Sasha Deal Company are concerned about irregularities in the firm's accounting system.One approach to identify problems in the records of the company would be to have a(n) ________ performed.