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    Please select the best answer True/False and Multiple choice

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    Question 1 5 points Save
    The primary difference between "Financial Accounting" and "Managerial Accounting" is that Managerial Accounting gives an historical perspective.
    True
    False

    Question 2 5 points Save
    Accounting has frequently been referred to as the "language of business" .
    True
    False

    Question 3 5 points Save
    "Current", "Near-term" and "short-term" all mean the same thing (are synonomous. in accounting terminology.
    True
    False

    Question 4 5 points Save
    "Risk" is generally thought to be the big trade-off in maximizing profits/return.
    True
    False

    Question 5 5 points Save
    "Cash" basis accounting is the best method for matching revenue with expenses.
    True
    False

    Question 6 5 points Save
    An intangible asset can have physical form i.e. can be seen and touched.
    True
    False

    Question 7 5 points Save
    Goodwill is a Tangible Asset.
    True
    False

    Question 8 5 points Save
    "Current" Assets means those which are convertible into Cash within 6 months..
    True
    False

    Question 9 5 points Save
    Payments make Liability accounts go down.
    True
    False

    Question 10 5 points Save
    The "Time Value of Money" concept basically states that a dollar today is worth less than a dollar in the future.
    True
    False

    Question 11 5 points Save
    GAAP prepared Financial Statements require that they be accompanied by Notes.
    True
    False

    Question 12 5 points Save
    "GAAP" stands for "Generally Accepted Auditing Principles"..
    True
    False

    Question 13 5 points Save
    Dividends paid by a firm make its Retained Earnings account go up.
    True
    False

    Question 14 5 points Save
    A payment that is exactly the same amount and made at equally spaced intervals of time is called an "Annuity".
    True
    False

    Question 15 5 points Save
    A Capital Budget usually involves the analysis of short-term projects.
    True
    False

    Question 16 5 points Save
    Capital Stock plus Paid-in-Capital plus Retained Earnings make up the Stockholders Equity section on a Balance Sheet.
    True
    False

    Question 17 5 points Save
    Under "Accrual" accounting, expenses are recognized when monies are paid out.
    True
    False

    Question 18 5 points Save
    Cost of Goods Sold is used in determining Gross profit.
    True
    False

    Question 19 5 points Save
    A Discounted Cash Flow analysis considers the time value of money in evaluating a project.
    True
    False

    Question 20 5 points Save
    "Profitability" and "Viability" are two main goals of financial management.
    True
    False

    Question 21 5 points Save
    The primary function of a Management Control System ("MCS". is to detect fraud.
    True
    False

    Question 22 5 points Save
    The difference between the actual and budgeted amounts is known as a "Variance."
    True
    False

    Question 23 5 points Save
    The rule of "Full Disclosure" requires financial reports to disclose any information needed to assure a fair presentation.
    True
    False

    Question 24 5 points Save
    When an outside accountant "certifies" i.e. gives a "clean opinion" on a company's financial statements, he is telling the reader that the statements are free of any errors.
    True
    False

    Question 25 5 points Save
    Public companies are not required to report their Earnings Per Share ("EPS"..
    True
    False

    Question 26 5 points Save
    A firm utilizing 'Operating leverage' generally incurs higher fixed costs.
    True
    False

    Question 27 5 points Save
    Contingent liabilities need not be mentioned or referred to in a company's audited financial statements.
    True
    False

    Question 28 5 points Save
    Maximizing liquidity and solvency is a good financial strategy.
    True
    False

    Question 29 5 points Save
    Leasing is considered another source of Financing.
    True
    False

    Question 30 5 points Save
    It is okay to co-mingle the assets of one entity with another as long as they have the same ownership.
    True
    False

    Question 31 5 points Save
    The mixture of debt and equity used by the firm to finance its operations is called:
    working capital management.
    financial depreciation.
    agency cost analysis.
    capital budgeting.
    capital structure.

    Question 32 5 points Save
    The financial statement showing a firm's earnings over a period of time is the:
    Income statement.
    Balance sheet.
    Statement of cash flows.
    Tax reconciliation statement.
    Shareholders' equity sheet.

    Question 33 5 points Save
    The financial statement showing a firm's accounting value on a particular date is the:
    Income statement.
    Balance sheet.
    Statement of cash flows.
    Tax reconciliation statement.
    Shareholders' equity sheet.

    Question 34 5 points Save
    A current asset is:
    Any item currently owned by the firm.
    An item that the firm expects to own within the next year.
    An item owned by the firm that it expects to convert into cash within the next 12 months.
    Property, Plant and Equipment
    The market value of all the items currently owned by the firm.

    Question 35 5 points Save
    A company's financial "viability" is measured by:
    Profit and Loss
    Hurdle Rate
    Dividend Policy
    Liquidity and Solvency
    Ability to pay taxes

    Question 36 5 points Save
    Balance Sheet Assets __________.
    I -are always equal to total liabilities minus shareholders' equity
    II -are always equal to the firm's total liabilities plus equity
    III -are listed in order of increasing liquidity from top to bottom
    I only
    II only
    III only
    I and III only
    II and III only

    Question 37 5 points Save
    Under GAAP, balance sheet assets are __________.
    carried on the books at historical cost
    only carried on the books if they are relatively liquid
    carried on the books at market value
    listed in order of increasing relative liquidity from top to bottum

    carried at the larger of historic cost or market value

    Question 38 5 points Save
    The following are considered Assets of a firm or entity:
    I -Accounts Receivable
    II -Accounts Payable
    III -Inventory
    IV -Equipment
    V -Interest
    II. III, and V
    I, III, and IV
    I, II, and III
    All of the above
    None of the above

    Question 39 5 points Save
    The following is considered the "Common Denominator" of all financial statements:
    Total assets
    Money or currency (dollars in the US.
    Stockholder's Equity
    Trade Credit
    None of the above

    Question 40 5 points Save
    A firm has Current Assets of $7,500, Total Assets of $12,500, Current Liabilities of $4,500, and Total Liabilities of $6,500.
    The firm's Net Working Capital is:
    $3,000
    $4,500
    $6,000
    $7,500
    $9,500

    Question 41 5 points Save
    The Owner's or Stockholder's Equity is:
    $3,000
    $4,500
    $6,000
    $7,500
    None of the above

    Question 42 5 points Save
    Its "Current Ratio" is:
    0.60 to 1
    1.67 to 1
    1.15 to 1
    2.00 to 1
    None of the above.

    Question 43 5 points Save
    The following are areas of "Activities" found on a Statement of Cash Flows:
    Investing Activities
    Operating Activities
    Financing Activities
    All of the above
    None of the above

    Question 44 5 points Save
    If a firm's Contribution Margin is $2,750 and its Revenue is $5,000, then its. Variable Costs must be:
    $1,250
    $2,250
    $2,750
    $4,500
    $5,250

    Question 45 5 points Save
    The following are considered examples of a firm's Expense Accounts:
    I -Interest Paid
    II -Interest Earned
    III -Notes Payable
    IV -Depreciation
    V -Wages
    I and V
    II, III, and IV
    I, IV and V
    I, III, and V
    All of the above

    Question 46 5 points Save
    The two major types of Leverage are:
    I -Operating
    II -Floating
    III -Financial
    IV -Benchmark
    V -Liquid
    I and II
    II and IV
    I and III
    III and IV
    I and IV

    Question 47 5 points Save
    Machine A cost $15,000. Machine B cost $35,000. They both produce the same part that sells for $1 each. The variable costs to produce the part are $.75 (seventy-five cents. each for Machine A and $.50 (fifty cents) each for Machine B.)
    What volume is required for Machine A to break even:
    50,000 units
    60,000 units
    70,000 units
    80,000 units
    90,000 units

    Question 48 5 points Save
    Machine A cost $15,000. Machine B cost $35,000. They both produce the same part that sells for $1 each. The variable costs to produce the part are $.75 (seventy-five cents) each for Machine A and $.50 (fifty cents. each for Machine B.
    At what volume do both machines generate an equal profit:
    50,000 units
    60,000 units
    70,000 units
    80,000 units
    90,000 units

    Question 49 5 points Save
    Machine A cost $15,000. Machine B cost $35,000. They both produce the same part that sells for $1 each. The variable costs to produce the part are $.75 (seventy-five cents. each for Machine A and $.50 (fifty cents) each for Machine B)
    What is the "Contribution Margin" per unit for Machine B:
    $.25
    $.50
    $.75
    $5,000
    None of the above

    Question 50 5 points Save
    Gross Profit on Sales (%. i.e. Gross Profit/Sales is an example of what ratio:)
    Liquidity
    Asset Management
    Debt (Leverage)(Solvency)
    Profitability
    Market Value

    Question 51 5 points Save
    Which one of the following is not usually regarded as a source of "Capital":
    Venture Capitalists
    Private Placement or Equity firms
    The Stock market
    Commercial Banks
    The Bond market

    Question 52 5 points Save
    A company orders $1,000 of inventory in November to be delivered in
    December. The accounting entry to record this transaction on the books in November would be as follows:
    Increase Assets (Inventory. and decrease Cash
    Increase Assets (Inventory. and increase Liabilities (Accounts Payable)
    Increase Cost of Sales and increase Liabiliti
    Increase Expenses and increase Revenues
    No accounting entry is required to record this transaction in the month of November

    Question 53 5 points Save
    All of the following, except one, can be found in the "Operating Activities" section of a Cash Flow Statement. Please identify it:
    Depreciation
    Decrease in Accounts Receivable
    Increase in Accounts Payable
    Sale of fixed Assets
    Increase in Inventory

    Question 54 5 points Save
    Please identify one of the following as not normally found in "Notes to Financial Statements":
    The company's significant accounting policies.
    Leasing commitments
    Contingent Liabilites
    Owners Compensation
    Goodwill Impairment (if any)

    Question 55 5 points Save
    Which of the following is generally regarded as a potential reader or user of a company's Financial Statements:
    Stockholders i.e. shareholders, investors
    Competitors
    Customers and Vendors (Suppliers)
    Employees and Management
    All of the above

    Question 56 5 points Save
    A good system of Internal Control is designed to:
    Insure the efficiency and effectiveness of operations
    Compliance with all laws, rules and regulations
    Reliable reporting of financial results
    Safeguard the assets of the firm
    All of the above

    Question 57 5 points Save
    An independent auditor's Opinion can take one of the following forms:
    Unqualified or "clean"
    Qualified
    Adverse
    None of the above
    All of the above (a thru c)

    Question 58 5 points Save
    The following are considered to be elements required in a good system of
    Internal control:
    1 -Having an 'audit' trail
    2 -Adequate documentation
    3 -Employee Rotation
    4 -Proper authorization
    5 -All of the above
    1, 2 and 3
    1, 2 and 4
    2, 3 and 4
    1, 3 and 4
    5

    Question 59 5 points Save
    Under accrual basis accounting, revenue may be recognized:
    When a company issues or sells its own stock
    When it trades (barters. goods or services to another for equal value in goods or services
    This year when selling something that is to be delivered next year
    If it can document a material increase in the market value of a fixed asset
    None of the above

    Question 60 5 points Save
    The purchase of merchandise on account would, on the buyer's books:
    Increase assets and increase expenses
    Increase assets and increase liabilities
    Increase liabilities and decrease assets
    Have no effect on assets
    None of the above.

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    https://brainmass.com/business/annuity/please-select-the-best-answer-true-false-and-multiple-choice-79724

    Solution Preview

    1. False
    2. True
    3. True
    4. True
    5. False
    6. False
    7. False (Intangible Asset)
    8. False (within one year)
    9. True (outstanding liabilities will reduce)
    10. False
    11. True
    12. False
    13. False
    14. True
    15. False
    16. True ( There will also be reduction of Treasury stocks if any)
    17. False
    18. True (Sales- Cost of goods sold = Gross profit)
    19. True
    20. False ( Shareholder maximization, ...

    $2.19

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