Question 1

Sri manages the sales force for his company.He is engaged in the ________ activity.
A)operating
B)accounting
C)financing
D)investing

Accepted Answer

Sri's role in managing the sales force involves the day-to-day operation of the sales department, including setting sales targets, assigning territories, managing salespeople, and monitoring sales performance. This is an operating activity, which involves managing and carrying out the company's core business functions to generate revenue and profits. Accounting, financing, and investing are all different types of financial management activities that involve monitoring and allocating the company's resources, but they are not directly related to managing the sales force.

Question 2

Describe the purpose of budgets in a business.

Accepted Answer

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Question 3

Explain the accounting equation.

Accepted Answer

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Question 4

________ activities provide the necessary funds to start a business and to expand it after it begins operations.
A)Selling
B)Financing
C)Operating
D)Investing

Accepted Answer

Financing activities include obtaining funding from investors, borrowing from banks or other lenders, and issuing bonds or other securities. These activities provide the necessary funds to start a business and to expand it after it begins operations. Selling, operating, and investing activities are unlikely to provide sufficient funds for these purposes.

Question 5

Julie is evaluating which state her company will expand into next.She is engaged in the ________ activity.
A)accounting
B)operating
C)marketing
D)investing

Accepted Answer

Investing activities involve decisions about where to allocate resources for future growth, such as expanding into new states.

Question 6

Explain the purpose of the Sarbanes-Oxley Act.

Accepted Answer

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Question 7

The natural progression of a business begins with ________.
A)operating
B)investing
C)financing
D)selling

Accepted Answer

The natural progression of a business typically begins with financing, where the business seeks capital or funding to start operations, invest in assets, or cover initial expenses.

Question 8

Olga owns a business and is reviewing her company's current financial statements.As a user of accounting information,Olga is most interested in using this information to ________.
A)evaluate credit risk
B)approve new issues of stocks and bonds
C)plan and control
D)evaluate tax liabilities

Accepted Answer

Planning and control are the key objectives of reviewing financial statements, as they help business owners like Olga to make informed decisions regarding the allocation of resources, expenses, and revenue generation to achieve their long-term goals. While evaluating credit risk, approving new issues of stocks and bonds, and evaluating tax liabilities are important aspects of financial management, they are not the primary objectives of reviewing financial statements.

Question 9

Public accountants typically perform all of the following tasks for a business client EXCEPT ________.
A)tax planning
B)reviewing a firm's financial statements
C)developing the firm's marketing strategy
D)management consulting

Accepted Answer

Public accountants are not typically responsible for developing a firm's marketing strategy. They are primarily focused on providing financial and tax-related services to their clients, such as tax planning, financial statement review, and management consulting. Marketing strategy development is usually handled by marketing professionals or executives within the company.

Question 10

________ activities focus on selling goods and services.
A)Marketing
B)Operating
C)Financing
D)Investing

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Question 11

Explain the differences between public accountants and management accountants.

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Question 12

________ activities focus on providing valuable assets to a business.
A)Marketing
B)Investing
C)Selling
D)Operating

Accepted Answer

Investing activities involve acquiring assets that are expected to generate income or increase in value over time. These assets can include property, plant, and equipment, as well as investments in stocks, bonds, or other financial instruments. By acquiring and holding these assets, a business can generate revenue, reduce expenses, and increase profitability over the long term. Marketing, selling, and operating activities focus more on generating sales and revenue in the short term.

Question 13

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are ________.
A)statisticians
B)accountants
C)IRS agents
D)IRS agents managers

Accepted Answer

Accountants are the professionals who are responsible for gathering, recording, reporting, and interpreting the financial information of an organization. Statisticians are mainly concerned with collecting and analyzing data, while IRS agents work for the government agency responsible for tax collection. IRS agents managers oversee the work of IRS agents, but they are not directly responsible for financial reporting and interpretation.

Question 14

What is accrual accounting? How does depreciation affect net income and cash flow?

Accepted Answer

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Question 15

Identify and briefly describe the four categories of financial ratios.

Accepted Answer

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Question 16

Ricardo is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Ricardo is most interested in using this information ________.
A)to plan and control
B)in contract negotiations
C)to make an investment decision
D)evaluate credit risk

Accepted Answer

As a loan officer for a bank, Ricardo's primary concern would be evaluating the creditworthiness of a prospective borrower. Therefore, he would be most interested in using the financial statements to assess the borrower's ability to repay the loan and determine the level of credit risk associated with lending to the borrower. Option A is more relevant for internal users such as managers, while option B is more relevant for external users such as investors. Option C may also be of interest to investors but is less relevant for loan officers.

Question 17

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

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Question 18

Define GAAP and explain its purpose.

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Question 19

Melissa works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Melissa's job?
A)auditor
B)systems analyst
C)investor
D)accountant

Accepted Answer

Melissa's job involves preparing financial reports, which is primarily the responsibility of an accountant. Despite the fact that the other options may involve analyzing and interpreting financial information, they do not appear to describe the primary responsibilities of Melissa's position.

Question 20

What is the purpose of the balance sheet? Explain how it is it organized.

Accepted Answer

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Quiz 15: Understanding Accounting and Financial Statements

Sri manages the sales force for his company.He is engaged in the ________ activity.

Describe the purpose of budgets in a business.

Explain the accounting equation.

________ activities provide the necessary funds to start a business and to expand it after it begins operations.

Julie is evaluating which state her company will expand into next.She is engaged in the ________ activity.

Explain the purpose of the Sarbanes-Oxley Act.

The natural progression of a business begins with ________.

Olga owns a business and is reviewing her company's current financial statements.As a user of accounting information,Olga is most interested in using this information to ________.

Public accountants typically perform all of the following tasks for a business client EXCEPT ________.

________ activities focus on selling goods and services.

Explain the differences between public accountants and management accountants.

________ activities focus on providing valuable assets to a business.

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are ________.

What is accrual accounting? How does depreciation affect net income and cash flow?

Identify and briefly describe the four categories of financial ratios.

Ricardo is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Ricardo is most interested in using this information ________.

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

Define GAAP and explain its purpose.

Melissa works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Melissa's job?

What is the purpose of the balance sheet? Explain how it is it organized.