BUS 101 Chapter 14

Multiple Choice

How does the outlook look for a career in accounting?

• Bad

• Okay

• Good

• Great

Multiple Choice

What did the Dodd Frank Act aim to address?

• Fraudulent accounting

• Risk in the banking system

• Tax evasion

• International trade regulations

Multiple Choice

What is the primary function of forensic accounting?

• To prepare tax returns

• To analyze financial documents for fraud

• To conduct audits

• To manage financial investments

Multiple Choice

Which of the following best describes the term "ledger"?

• A book or computer file used for recording business transactions in chronological order

• A collection of all accounts used by a company, with their individual transactions and balances

• A summary report of all financial transactions during a specific period

• A document used to track sales and purchases

Multiple Choice

Any amounts owed by a business and reported on the balance sheet are referred to as ________________.

• assets
• liabilities
• profit
• expenses

Multiple Choice

A(n) ____ firm provides accounting services to clients such as individuals or businesses.

• for-profit business

• public accounting

• not-for-profit

• free enterprise system

Multiple Choice

What are the primary responsibilities of private accountants?

• Prepare and analyze financial statements

• Conduct audits

• Manage payroll

• File taxes

Multiple Choice

Which of the following is an example of a professional accounting certification?

• Certified GAAP Accountant

• Certified Public Accountant

• Certified Management Accountant

Multiple Choice

CPA stands for

• Certified Personal Accountant

• Certified People Audit

• Care Professional Animal

• Careful Personal Accountant

Multiple Choice

What is the primary difference between bookkeeping and accounting?

• Bookkeeping is more complex than accounting

• Bookkeeping requires more training than accounting

• Bookkeeping is limited to routine recording of transactions

• Bookkeeping is broader in scope than accounting

Multiple Choice

Which of the following firms is NOT part of the Big Four?

• Ernst & Young

• KPMG

• PricewaterhouseCoopers

• Grant Thornton

Multiple Choice

Who is the user of managerial accounting information?

• Investors

• Managers

• Creditors

• Business competitors

Multiple Choice

What are the internal uses of accounting mentioned in the image?

• Managerial accounting

• Cash flow

• Budget

• All of the above

Multiple Choice

What are the external uses of accounting mentioned in the text?

• Filing income taxes

• Obtaining credit

• Reporting results to stockholders

• All of the above

Multiple Choice

What are the two main uses of accounting information as mentioned in the image?

• To aid internal planning and control

• For external purposes

• To prepare tax returns

• To analyze market trends

Multiple Choice

What deceptive accounting practices did Greece engage in during the global financial crisis?

• Hiding debt from public balance sheets

• Increasing pension fund deficits

• Borrowing from pension funds

• Reducing financial transparency

Multiple Choice

If total assets increased $35,000 during a period and total liabilities increased $14,000 during the same period, the amount and direction (increase or decrease) of the change in the owner’s equity for that period is…

• $21,000 increase

• $21,000 decrease

• $24,000 increase

• $24,000 decrease

Multiple Choice

What is the purpose of double-entry bookkeeping?

• To classify transactions

• To balance the accounting equation

• To record transactions in one account

• To track only cash transactions

Multiple Choice

What is typically the first step in the accounting cycle?

• Preparing financial statements

• Journalizing transactions

• Posting to the ledger

• Preparing a trial balance

Fill in the Blank

A retail fashion buyer purchased 500 units of basic denim jeans for $9 each. If the jeans are sold in store for $24.99, calculate the gross profit the store will make if all jeans are sold. Use the formula: Gross Profit = (Selling Price - Cost Price) x Quantity Sold.

Multiple Choice

Scarlett and Aarav are running a lemonade stand. What formula should they use to calculate their gross profit?

• Total Revenue - Operating Expenses

• Total Revenue - Cost of Goods Sold

• Net Income + Operating Expenses

• Total Revenue - Net Income

Multiple Choice

What is gross income, and how is it calculated?

• Total revenue

• Revenues minus cost of goods sold

• Total expenses

• Net profit

Multiple Choice

What is the purpose of depreciation in financial statements?

• To increase asset value

• To spread costs over accounting periods

• To eliminate expenses

• To calculate profit

Multiple Choice

What is net income?

• Total profit after expenses

• Total revenue before expenses

• Total expenses deducted from revenue

• Total cash flow from operations

Multiple Choice

What does a balance sheet present about an organization?

• A snapshot of financial position

• A summary of cash flow

• A detailed income statement

• A forecast of future earnings

Multiple Choice

If Assets are $7,300 and Liabilities are $500, how much is Capital?

• $7,800

• $7,300

• $6,800

Multiple Choice

What are the two categories of assets mentioned in the image?

• Current assets

• Fixed assets

• Accounts payable

• Long-term liabilities