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Exam 17: Understanding Accounting and Financial Information

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Question 181

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Allison Robards is the owner of Backstreet Books,a small eclectic style bookstore in a bustling college town.Allison prides herself in selecting hard to find books and magazines that her clientele enjoy.Recently,Allison is experiencing a cash flow shortage,and she is concerned that she may be purchasing too many copies of each title.Having recently completed a business class,you suggest to Allison that she calculate the ______________ ratio for her store,and then compare it to other stores in her industry.

A) current
B) debt to equity
C) return on equity
D) inventory turnover

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Question 182

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The steps in the accounting cycle do not need to be followed in the order stated.Monthly financial statements can be prepared with a good amount of accuracy,prior to posting in the ledger or preparing the trail balance.

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Question 183

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As Hector was packing to return to State University after his summer vacation,he realized that he owned many valuable things such as a laptop computer,a stereo system,and a DVD player.An accountant would list all of these as Hector's:

Cash flow statements identify three sources of cash receipts and disbursements: Assets,liabilities and owners' equity.

Citizens and special interest groups often have interest in the information generated by government accounting.

Brianna is a bookkeeper for Monograms,Limited.She takes the firm's transactions and records them in a record book or computer program referred to as:

Money received from tickets sold for the Rolling Stones concert is recorded as net income on the concert promoter's income statement.

An individual who provides accounting services to individuals and businesses on a fee basis is referred to as a private accountant.

The use of computerized accounting systems _____________.

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

Similar to the example of FIFO and LIFO inventory accounting methods depicted in the Connecting with Small Business box titled,"LIFO or FIFO?" a college store purchased sweatshirts for the upcoming fall semester.Using the following data,where a total of 100 sweatshirts were purchased by the store and placed in inventory,select the correct statement from the following choices.

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.

The basic earnings per share and the diluted earnings per share would have quite different values for a firm that relied heavily on preferred stock and convertible debt securities to acquire funds.

A bookkeeper's first task is to record the firm's transactions in a journal.

Once a trial balance has been prepared,the next step of the accounting cycle involves:

A firm's efficient use of its assets in running the business is key to maintaining sufficient cash flow.Ratios that accountants utilize to measure the efficient use of assets are called ____________ ratios.

A basic difference between managerial accounting and financial accounting is that managerial accounting:

As a bank loan officer,you are considering a loan application by Peak Performance Sporting Goods.The company has provided you with the following information: Peak Performance's debt to owners equity ratio (rounded to the nearest tenth of a percent) is:

________ is the monetary value that is received for goods sold,services rendered and money received from other sources.

It is impossible to run a company effectively without the ability to read and understand basic accounting reports and financial statements.