Flashcards on Accounting

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Yvonne’s job entails detecting problems such as embezzlement, waste, mismanagement, and employee theft at her organization. In this case, Yvonne is a _____. Question 4 options: management consultant government accountant internal auditor certified public accountant
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internal auditor
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Ascot Inc. has decided to adopt activity-based costing. One reason the firm’s accountants decided on this approach was to: Question 3 options: provide a more meaningful way to assign indirect costs to specific products. simplify the process of assigning direct costs to specific products. base costing on the amount of direct labor used to produce each product. move from assigning costs to activities to assigning costs to goods and services.
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move from assigning costs to activities to assigning costs to goods and services.
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In a statement of cash flows, cash from _____ show the amount of cash that flows into a company from the sale of goods and services. Question 8 options: auxilliary activities financing activities investing activities operating activities
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operating activities
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A stockholders’ equity statement shows: Question 10 options: how net income and dividends affect the retained earnings of a firm. the revenues, expenses, and net income over a firm’s accounting period. a firm’s sources and uses of cash in a given accounting period. both the operational and financial budgets of a firm.
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how net income and dividends affect the retained earnings of a firm.
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Stockholders would most likely use accounting information provided by their firm to: Question 1 options: make capital budgeting decisions and financial forecasts. gauge whether the firm has made a strong return on their investment. determine whether the firm can repay them for the orders it places. obtain information needed to satisfy legal reporting requirements. Save
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gauge whether the firm has made a strong return on their investment.
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Andy, who works as the Royston Corporation, is tasked with leading their external auditing project. He is also doing consulting work for Maynard Inc. Andy is an example of a(n) _____ accountant. Question 2 options: public management government environmental
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public
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The accounting equation shows us that the value of a firm’s assets must equal the: Question 3 options: value of the firm’s earnings at any specific point in time. value of the firm’s revenues minus expenses. amount of owners’ equity. amount of financing provided by owners and creditors.
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amount of financing provided by owners and creditors.
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As key users of accounting information, employees typically evaluate their company’s financial statements to: Question 4 options: provide financial information to federal agencies. find if the company can pay for the products that it orders. identify possible layoffs, shutdowns, or pay raises. receive up-to-date information about inventory and capital.
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identify possible layoffs, shutdowns, or pay raises.
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_____ provide reports and analysis to senior-level employees of a firm to assist them in making better informed business decisions. Question 7 options: Government accountants Financial accountants Public accountants Managerial accountants
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Managerial accountants
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_____ are valuable things owned by the firm. Question 9 options: Prepaid expenses Owners’ equities Liabilities Assets
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Assets
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The major responsibilities of financial accounting is the preparation of the: Question 10 options: balance sheet, income statement, and statement of cash flows. journal ledger, cash budget, and company bylaws. articles of incorporation, auditor’s opinion, and master budget. management accounting practices, social audit, and journal ledger.
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balance sheet, income statement, and statement of cash flows.
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The _____ budget of a firm brings together all of its budgeting documents to provide a unified plan for a specific budget period. Question options: contingency master dividend implicit
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master
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A(n) _____ opinion is issued if the external auditor does not find any problems with the way a firm prepares and presents its financial statements. Question options: quality unqualified adverse corrective
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unqualified
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Priya was recently hired by RLM Inc. In her role as an accountant, she prepares reports and analyzes financial information related to the company. In this case, Priya is an example of a _____ accountant. Question options: government forensic management public
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management
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Landis has been contracted as an external auditor by the Crawley Company. In his audit, he finds certain minor issues in the firm’s financial statements, but is of the view that the statements are nevertheless an accurate representation of the firm’s financial status. Landis is most likely to issue a(n) _____ opinion. Question options: qualified unqualified adverse corrective
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qualified
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By subtracting dividends paid to shareholders from the net income, accountants are able to calculate the: Question options: increase in net income. decrease in profit margins. change in pre-tax income. change in retained earnings.
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change in retained earnings.
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Which of the following indicates what a firm owes its creditors? Question options: Prepaid expenses Owners’ equity Liabilities Assets
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Liabilities
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The _____ is the last financial budget; it shows how the firm’s operations, investing, and financing activities are expected to affect all of the asset, liability, and owners’ equity accounts. Question options: cash budgets capital expenditure budget budgeted income statement budgeted balance sheet
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budgeted balance sheet
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The _____ summarizes a firm’s financial position at a specific point in time by listing its assets, liabilities, and owners’ equity.
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A balance shee
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Which of the following is a difference between financial accounting and managerial accounting? Question options: Financial accounting is designed to meet the needs of company managers, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm. Financial accounting provides accounting information exclusively to government agencies, whereas managerial accounting is designed to specially meet the needs of suppliers and creditors. Financial accounting provides stockholders with information about the overall financial performance of a firm, whereas managerial accounting is designed to meet the needs of company managers. Financial accounting provides company accounting information for public consumption, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm.
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Financial accounting provides stockholders with information about the overall financial performance of a firm, whereas managerial accounting is designed to meet the needs of company managers.
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In a statement of cash flows, which of the following items would indicate investing activities? Question options: Cash received from taking out long-term loans Interest received from the ownership of financial securities Cash received from the sale of fixed assets Cash from dividends
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Cash received from the sale of fixed assets
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_____ work within an organization, prepare reports, and analyze financial information such as budgets and cost management. Public accountants Government accountants Management accountants Forensic accountants
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Management accountants
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The accounting equation is _____. Question options: Assets = Liabilities – Owner’s Equity Liabilities = Assets + Revenue Assets = Liabilities + Owner’s Equity Assets = Liabilities + Net Income
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assets = liabilities + owners’ equity.
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_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period. Question options: Budgeting Investing Auditing Trading
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Budgeting
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To make a financial forecast, Rob needs the debt, cost, and profit statistics of all branches of the Tyndale Corporation. Based on the information that he needs, Rob is a _____. Question 3 options: consumer advocate financial manager government accountant creditor
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financial manager
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Shelly is a loan officer who approves loans for small businesses. One factor she looks at carefully when making loan decisions is the amount of outstanding debt the firm already has. She can find this information by looking at the firm’s: Question 5 options: income statement. balance sheet. articles of incorporation. cash budget.
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balance sheet.
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Managerial accounting primarily serves the needs of a firm’s: Question 10 options: internal stakeholders. creditors. government regulators. external auditors.
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internal stakeholders.
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Which of the following would be listed in the liabilities section of the balance sheet? Question options: Retained earnings Common equity Wages payable Net income
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Wages payable
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Which of the following is an advantage of using bottom-up budgeting? Question options: It is less time-consuming than the top-down approach. It eliminates most forms of budgetary slack. Middle managers are likely to be highly motivated to achieve budgetary goals. Supervisory managers are likely to know the long-term strategic needs of the company.
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iddle managers are likely to be highly motivated to achieve budgetary goals.
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_____ are also called explicit costs. Question options: Indirect costs Out-of-pocket costs Opportunity costs Internal costs
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Out-of-pocket costs
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The Financial Accounting Standards Board (FASB) establishes the _____ used in the practice of financial accounting. Question options: yearly budgeting rules and principles financial auditing methods and principles generally accepted accounting principles intra-organizational accounting principles
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generally accepted accounting principles
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In activity-based costing, product costs are assigned based on links between activities that drive costs and _____. Question options: the liabilities of a firm the resulting revenues the production of specific goods the pricing of specific goods
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the production of specific goods
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Which of the following does not classify as an asset of a company? Question options: Cash Accounts receivable Salaries payable Buildings
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Salaries payable
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Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the: Question options: preparation of financial statements. preparation of a company’s tax returns. audit of a company’s financial books. preparation of organizational budgets.
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preparation of financial statements.
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Cash flows from _____ activities show the cash a firm received from issuing additional shares of its own stock. operating financing investing diversifying
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financing
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Which of the following statements is true of management accountants? Question options: They work with multiple clients on a fee basis. They are employed as part of an organization. They provide accounting information exclusively to the government. They ensure that the government meets accounting regulations.
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They are employed as part of an organization.
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Which of the following statements is true of the FASB? Question options: Its authority comes from the Internal Revenue Service. It consists of seven members appointed by the Financial Accounting Foundation. Its members cannot be reappointed to serve additional terms. Its members can retain ties with firms in which they were previously employed.
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It consists of seven members appointed by the Financial Accounting Foundation.
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____ are costs that are the result of a firm’s general operations and are not explicitly tied to any specific cost object. Question options: Direct costs Mediated costs Explicit costs Indirect costs
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Indirect costs
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As a shareholder of the Lindburgh Corporation, Lara wants to know whether the company earned a profit or loss during the past year. Lara can find this information in the company’s _____. Question options: master budget income statement statement of cash flows articles of incorporation
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income statement
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Which of the following represents assets on a balance sheet with a limited useful life that are subject to subtraction of accumulated depreciation from the original value? Question options: Stock Revenue Equipment Owners’ equity
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Equipment
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Which of the following is a difference between an independent auditor’s unqualified opinion and an independent auditor’s qualified opinion?​ Question options: An unqualified opinion is given if the independent auditor identifies minor concerns but believes that on balance the firm’s statements are a fair representation of the company’s financial position, whereas a qualified opinion is given if the independent auditor discovers widespread and serious problems with a firm’s statements. An unqualified opinion is given if the independent auditor identifies minor concerns but believes that on balance the firm’s statements are a fair representation of the company’s financial position, whereas a qualified opinion is given if the independent auditor has no problems with the way a firm’s financial statements were prepared and presented. An unqualified opinion is given if the independent auditor has no problems with the way a firm’s financial statements were prepared and presented, whereas a qualified opinion is given if the independent auditor identifies minor concerns but believes that on balance the firm’s statements are a fair representation of the company’s financial position. An unqualified opinion is given if the independent auditor discovers widespread and serious problems with a firm’s statements, whereas a qualified opinion is given if the independent auditor has no problems with the way a firm’s financial statements were prepared and presented.
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An unqualified opinion is given if the independent auditor has no problems with the way a firm’s financial statements were prepared and presented, whereas a qualified opinion is given if the independent auditor identifies minor concerns but believes that on balance the firm’s statements are a fair representation of the company’s financial position.
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Which of the following best defines cost? Question options: Anything of value that a firm has at its disposal The value of a received item in a monetary exchange The value of expense inflows in an organization The value of what is given up in exchange for something else
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The value of what is given up in exchange for something else
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In accrual-basis accounting, expenses: Question options: must equal the amount of financing provided by the firm’s owners. are recognized only when cash is paid. are exempt from tax-based accounting treatment. are matched with the revenues they help generate.
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are matched with the revenues they help generate.
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_____ is the difference between a firm’s revenue and its cost of goods sold. Question options: Wages payable Out-of-pocket cost Net operating income Gross profit
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Gross profit
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In the United States, the SEC has delegated the responsibility for developing accounting standards to a private organization called the . Question options: FAF FASB IRS IASB
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(FASB).
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Benji works for a private firm that has been contracted to examine the books of accounts of the Sanborn Corporation. After she has checked the figures and examined the company’s accounting methods, she is required to prepare a report on her findings. The work that Benji is tasked with is characteristic of a(n) _____. Question options: external auditor management accountant risk analyst internal auditor
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external auditor.
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Which of the following statements is true of activity-based costing? Question options: It determines the direct cost per unit of production. It is more complex than the direct labor method. It involves a three-stage process. It assigns costs based on the “one size fits all” rule.
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It is more complex than the direct labor method.

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