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Exam 15: Using Management Information Systems and Accounting Information

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Question 41

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Revenues − cost of goods sold − expenses = net income characterizes which financial statement?

A) Balance sheet
B) Statement of retained earnings
C) Statement of cash flows
D) Statement of financial position
E) Income statement

F) B) and C)
G) D) and E)

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Question 42

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Chase invests $5,000 of his own money in his new auto detailing business. He then obtains a loan and builds a small workshop in his backyard for $10,000. At this point assets are ____, liabilities are ____, and owners' equity is ____.

A) $10,000; $5,000; $15,000
B) $15,000; $10,000; $5,000
C) $5,000; $0; $5,000
D) $15,000; $10,000; $0
E) $10,000; $5,000; $5,000

F) A) and C)
G) A) and D)

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Question 43

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Christine has just earned her undergraduate degree in accounting and has successfully completed the CPA exam. She recently interviewed with a relatively small and new company and was offered a job. The offer sounded very promising; the job had opportunities to grow with the company and provided diverse challenges. Christine accepted the job. Once Christine started working, she realized that the owners and employees did not have a general understanding of accounting. She had to teach them the steps in an accounting cycle so they would be able to understand how she was going to create reports. When she talked about the statement of financial position, they had no idea what she was talking about. She was the qualified individual responsible for accounting. No one else working with her had much knowledg -Refer to Christine's First Job. When Christine explained the asset side of the statement, she included which of the following?

How might the information needs of a marketing manager differ from those of an operations manager?

Define a balance sheet (also called a statement of financial position). What does it balance?

Managers often compare financial and accounting data with previous accounting periods and with competing firms.

Explain why a firm's financial statements should be audited.

Television sets that Best Buy owns for selling to its customers are classified as

An accountant can calculate a return on sales ratio to determine how well the firm is using the money invested by the owners.

Equipment and patents are known as intangible assets.

A private accountant is an accountant whose services may be hired on a fee basis by individuals or business firms.

Salaries payable, accounts payable, and taxes payable are examples of

Which type of manager would be most concerned with information about the products offered by competitors?

Debts that will be repaid in one year or less are known as current liabilities.

When Nathan applied for a loan to expand his sailboat business, the bank required that his financial statements be carefully examined by a CPA. The bank is requiring Nathan to have his financial statements

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

While chief executives and financial officers are currently not subject to criminal penalties, they are required to certify periodic financial reports.

Schluster Hardware, Inc., had a gross profit of $380,000, operating expenses of $210,000, and income taxes of $48,000. What is Schluster's net income after taxes?

The ratio obtained by dividing net income after taxes by net sales is the

Ruin Company's net sales for the period were $175,000. Its cost of goods sold was $85,000. What is this firm's gross profit on sales?