QUESTION The acid-test (or quick) ratio consists of current assets divided by current liabilities. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The current ratio consists of current assets divided by current liabilities.
Date: September 3rd, 2020
QUESTION As an accountant for a large nonprofit organization, Carter knows that one of his chief responsibilities is to provide financial transparency. What is meant by financial transparency? A) giving stakeholders an accurate picture of what is happening to their money B) determining whether an organization is staying within its budget C) evaluating a client’s […]
Date: September 3rd, 2020
QUESTION The inventory turnover ratio can be used to measure a company’s efficiency. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The inventory turnover ratio consists of costs of goods sold in one year divided by the average value of the inventory. If this figure is high, it indicates that […]
Date: September 3rd, 2020
QUESTION Ratio analysis can be used to compare a company with other similar companies. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Ratio analysis can be used to analyze a firm’s performance to its stated objectives and to compare it to similar firms.
Date: September 3rd, 2020
QUESTION What is the most common use that the federal government makes of a firm’s accounting information? A) to evaluate the company’s financial health and credit rating B) to see whether the firm is profitable C) to ensure that appropriate tax revenues are collected D) to plan and guide the firm E) to monitor how […]
Date: September 3rd, 2020
QUESTION What is the term given to the recording of a firm’s financial transactions? A) accounting B) bookkeeping C) auditing D) balancing E) forecasting ANSWER Answer: B Explanation: B) Bookkeeping is basically the recording of a firm’s financial transactions.
Date: September 3rd, 2020
QUESTION Return on owners’ equity is also called profit margin. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Return on owners’ equity is also called return on investment (ROI). Return on sales is also called profit margin.
Date: September 3rd, 2020
QUESTION Assets may include unsold merchandise a company has on hand. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Assets include cash on hand, accounts receivable, marketable securities, and merchandise inventory.
Date: September 3rd, 2020
QUESTION The U. S. government’s fiscal year begins on July 1 and ends on June 30. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The U.S. government’s fiscal year begins on October 1 and ends on September 30.
Date: September 3rd, 2020
QUESTION An income statement must factor in the cost of goods sold. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: In an income statement, cost of goods sold must be subtracted from sales in order to obtain net profit.
Date: September 3rd, 2020
