Correct Answer: The impact a business's activities have on its overall financial performance
ti t i ti ti ti ti ti ti ti ti ti ti
Which report summarizes cash collections and cash expendituresfrom operating, investing,
ti ti ti ti ti ti ti ti ti ti
ti and financing activities over a period of time?
ti ti ti ti ti ti ti
Correct Answer: Statement of cash flows
ti t i ti ti ti
Which users would have a primaryconcern with an organization's ability to provide healthcare
ti ti ti ti ti ti ti ti ti ti ti ti ti
ti benefits?
Correct Answer: Employees
ti t i
Which body regulates a certified public accounting firm's audit practices when the firm is
ti ti ti ti ti ti ti ti ti ti ti ti ti
ti auditing a large publicly traded company?
ti ti ti ti ti
Correct Answer: The Public Company Accounting Oversight Board (PCAOB)
ti t i ti ti ti ti ti ti
What has had the most significant impact on accounting practices?
ti ti ti ti ti ti ti ti ti
,Correct Answer: Information technology ti t i ti
What two items of information are revealed on the balance sheet?
ti ti ti ti ti ti ti ti ti ti
Choose2 answers ti ti
CorrectAnswer: Ownership. ti t i
ti Debt
Which term is defined as the residual interest in the net assets of a company?
ti ti ti ti ti ti ti ti ti ti ti ti ti ti
Correct Answer: Owners' equity ti t i ti
A corporation has total liabilities of $300 million, total owners' equity of $100 million, and
ti ti ti ti ti ti ti ti ti ti ti ti ti ti
ti current assets of $50 million.
ti ti ti ti
What is the value of the firm's long-term assets?
ti ti ti ti ti ti ti ti
Correct Answer: $350 million ti t i ti
Which situation should result in revenue recognition on the income statement for the year
ti ti ti ti ti ti ti ti ti ti ti ti ti
ti ending 12/31/14 if the firm is using accrual-basis accounting?
ti ti ti ti ti ti ti ti
Correct Answer: In 2014, a company provides services to a customer for which cash will
ti t i ti ti ti ti ti ti ti ti ti ti ti ti
ti be collected the next year (2015).
ti ti ti ti ti
,Which categoryon the statement of cash flows summarizes cash receipts and payments to
ti ti ti ti ti ti ti ti ti ti ti ti ti
ti owners and creditors of the company?
ti ti ti ti ti
Correct Answer: Cash flows from financing activities
ti ti ti ti ti
Where would an investor find a summaryof a company's significant accounting policies?
ti ti ti ti ti ti ti ti ti ti ti ti
Correct Answer: In the notes to financial statements
ti ti ti ti ti ti
Which assurance does an external audit report provide for its readers?
ti ti ti ti ti ti ti ti ti ti
Correct Answer: The company's financial statements fairly reflect its financial position
ti ti ti ti ti ti ti ti ti
Reliable
Correct Answer: Information that can be verified
ti ti ti ti ti
Relevant
Correct Answer: ti Information having to do with the matter at hand ti ti ti ti ti ti ti ti
Material
Correct Answer: Information that is important enough to make a difference
ti ti ti ti ti ti ti ti ti
Conservatism
Correct Answer: ti Information related to recognizing losses as they occur ti ti ti ti ti ti ti
, What are steps in the decision cycle?
ti ti ti ti ti ti
Correct Answer: 1 Prepare financial statements. ti t i ti ti ti
2 Analyze financial statements.
ti ti ti
3 Gather information.
ti ti
4 Make decision.
ti ti
5 Implement decision.
ti ti
Partial financial information for a company is as follows:
ti ti ti ti ti ti ti ti
Current assets $36,543 ti ti
t i Total assets $58,719
ti ti
t i Current liabilities $24,824 ti ti
ti Total liabilities $48,561
ti ti
ti Stockholders'equity$10,158 ti ti
ti Sales $46,997 ti
Net Income $ 3,761
ti ti ti
Marketvalue of shares$41,316 ti ti ti ti
What is the price-earnings (PE) ratio for this company?
ti ti ti ti ti ti ti ti
Correct Answer: 11.0 ti t i
What is consistent with a continual decline in gross profit if the firm's cost of goods sold remains
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti
ti the same?
ti
Correct Answer: Continual decrease in sales ti t i ti ti ti
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