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WorksheetsAccountant, Management
Total questions: 72
Worksheet time: 36mins
At Step 1, we identified 5 transactions on 5 days. Which day recorded revenue?
January 20
JANUARY 5
JANUARY 17
Which of the following would cause the Trial Balance to be wrong?
YOU MADE A MISTAKE
DEPRECIATION IS NOT YET ACCOUNTED FOR
NET PROFIT FROM THE PREVIOUS PERIOD
ALL OF THE ABOVE
What do you do with temporary accounts before making the closing entries?
CANCEL THEM OUT TO ZERO
EMPTY THEM INTO PERMANENT ACCOUNT
ROLL THEM INTO SHAREHOLDER'S EQUITY
NOTHING, TEMPORARY ACCOUNTS JUST SIGNIFY THIS PERIOD
Which of the following specializations is most likely to be working with law enforcement as part of an investigation?
FORENSIC ACCOUNTING
AUDITING
WEALTH MANAGEMEN
PAYROLL SPECIALIST
Which of the following skills would be the most important to a great accountant?
COMPUTER SKILLS WITH MANY TYPES OF SOFTWARE
VERY ANALYTICAL AND DETAIL-ORIENTED
GREAT COMMUNICATION SKILLS, BOTH ORAL AND WRITTE
ALL OF THESE ARE NECESSARY TO BE A SUCCESSFUL ACCOUNTANT
Which professional designation has the highest total education requirement?
CPA
CFP
PFS
CMA
Which of the following is the easiest to calculate using information on the Balance Sheet?
CURRENT RATIO
OPERATING MARGIN
INTEREST COVERAGE
NET MARGIN
Which of the following ratios is the easiest to calculate using information found on the Income Statement?
NET MARGIN
CURRENT RATIO
DEBT TO EQUITY RATIO
INTEREST COVERAGE
Who would be a user of a financial report?
A POTENTIAL INVESTOR
A FORMER INVESTOR
A MANAGER AT THE COMPANY
AN EMPLOYEE OF THE COMPANY
Revenue Recognition means companies must…
RECORD REVENUE WHEN IT WAS EARNED
RECORD REVENUES WHEN PAYMENT IS RECEIVED
RECORD EXPENSES WHEN THEY ARE INCURRED
RECORD EXPENSES WHEN THEY ARE PAID
If a company specializing in computer equipment made a profit selling stock in another company, this would be recorded a...
REVENUE
NET INCOME
ASSETS
GAINS
Accountants record assets at purchase price, not market value. This is because of which assumption?
ECONOMIC ENTITY
MONETARY UNIT
GOING CONCERN
PERIODICITY
· Manipulating a financial report to make your company look like its profits were higher than reality would be violating which pillar of financial reporting?
Neutrality
n
What inventory method is most likely to be used in an inflation-sensitive business like oil refinement?
FIFO
LIFO
WEIGHTED AVERAGE
ANY ONE OF THE THREE
To write off an amount of your accounts receivable that you know will not be paid, you should…
Debit “Allowance for Doubtful Accounts”
DEBIT “BAD DEBT EXPENSE”
DEBIT “CASH”
CREDIT “BAD DEBT EXPENSE”
If costs of inventory is trending downwards, which accounting method will show the highest profits?
FIFO
LIFO
WEIGHTED AVERAGE
THEY WILL ALL SHOW THE SAME
What is the difference between a short-term and a long-term liability
LONG TERM LIABILITIES ARE DUE IN MORE THAN 6 MONTHS
LONG TERM LIABILITIES ARE DUE IN MORE THAN 1 YEAR
LONG TERM LIABILITIES ARE DUE IN MORE THAN 5 YEARS
COMPANIES CAN DEFINE THE THRESHOLD FOR THEMSELVES
Which type of bond has a higher value on the balance sheet?
SHORT-TERM BONDS
Premium bonds
DISCOUNT BONDS
JUNK BONDS
Which type of bond will pay more in interest over its life?
short term bond
premium bond
discount bond
B and C will pay the same amount
Which types of shares earn dividends first?
common stock
Preferred Stock
T bond
ALL STOCKS ARE PAID DIVIDENDS AT THE SAME TIME
What is “Retained Earnings”?
NET INCOME MINUS EXPENSES
GROSS INCOME MINUS EXPENSES
NET INCOME MINUS DIVIDENDS
GROSS INCOME MINUS DIVIDENDS
Which of the following will usually cause the biggest change to shareholder’s equity between years?
RETAINED EARNINGS
DIVIDEND PAYMENTS
STOCKPILES OF TREASURY STOCK
DIVIDENDS RECEIVED FROM OTHER INVESTMENTS
Which of the following would fail the Revenue Recognition test?
Expected revenue from a client who has bought $1000 worth of product every month on the last day of the month
EXPECTED REVENUE FROM A NEW CLIENT WHO HAS AGREED TO BUY $1000 WORTH OF PRODUCT THIS MONTH
REVENUE FROM SELLING 100 BUSHELS OF CORN AT THE LAST MARKET PRICE
REVENUE FROM SELLING 300 TOYS ON CREDIT TO A TRUSTED CUSTOMER
If you pay your supplier for $500 worth of goods in March, the goods arrive in April, and you sell them to customers in May, when do you recognize the $500 expense?
MARCH
APRIL
MAY
EQUALLY SPREAD OVER ALL 3 MONTHS
Your heating bill only comes once every 2 months, so your bill recording June and July’s usage arrives at the beginning of August. When should you record the heating expense?
JUNE ONLY
Divided between June and July, based on your usage
AUGUST, WHEN YOU ACTUALLY PAY THE BILL
EQUALLY SPREAD OVER ALL 3 MONTHS
If you sell a piece of equipment or property for more than you paid for it, the profit is recorded on the…
BALANCE SHEET
Income statement
CASH FLOW STATEMENT
NONE OF THE ABOVE
If the property you own has gone up in value, but you have not yet sold it, where do you record the increase in value?
INCOME STATEMENT
BALANCE SHEET
CASH FLOW STATEMENT
NONE OF THE ABOVE
How are large expenses with long useful lives accounted for?
Depreciated on the balance sheet
ADDED TO EXPENSES
WRITTEN OFF ASSETS
SUBTRACTED FROM THE INCOME STATEMENT
Which of the following is a symptom that there are NOT efficient capital markets?
The company missed its earnings estimate, and the price did not move
THERE ARE MANY BUYERS AND SELLERS, AND SHARES TRADE FREQUENTLY
THERE ARE MANY SPECULATIVE INVESTORS CAUSING BIG PRICE SWINGS
FINANCIAL NEWS TRAVELS VERY QUICKLY
If a company issues 200,000 shares on subscription at a price of $10 per share, with a 50% guarantee, how much cash do they record immediately?
$0
$100,000
$1,000,000
$2,000,000
If the conversion price is above the market price, why would a preferred shareholder with convertible shares continue to hold?
They believe the price will fall soon and want to keep their dividend
THEY WANT TO KEEP A STRONG ROLE IN THE MANAGEMENT OF THE COMPANY
THEY BELIEVE IN THE LONG-TERM GROWTH OF THE COMPANY AND WANT TO CONTINUE TO HOLD SHARES
ALL WISE INVESTORS WOULD CONVERT IN THIS CASE
Compare Ford (F) with Walmart (WMT) in 2016. Based on the Days of Sales Oustanding ratio, which company looks like a better investment?
Cannot compare, since this ratio is only useful comparing companies in the same industry
Ford
Walmart
Use the Quotes tool to find the annual income statement and balance sheet for Ford (F) in 2016 and 2015. What happened to the Total Asset Turnover?
went up
went down
Use the Quotes tool to find the annual income statement and balance sheet for Ford (F) in 2016 and 2015. In 2016, Ford's Inventory Turnover Ratio…
went up
went down
Why would a company have higher cash receipts than net income in a period?
THEY CANNOT, NET INCOME IS ALWAYS GREATER
More oustanding accounts receivable from previous periods paid in than new balances created
THE COMPANY TIGHTENED CASH POLICY BY DELAYING PAYMENTS OF ACCOUNTS PAYABLE
THIS CAN HAPPEN AFTER MAKING THE "SUNK COST" INVESTMENT IN A LARGE PROJECT
What is the difference between cash flow and net income for a given period?
CASH FLOW IS ALWAYS LESS THAN NET INCOME
Cash flow includes only items where cash entered or left the business.
CASH FLOW IS MORE USEFUL FOR DETERMINING PROFITABILITY
NONE OF THE ABOVE
Which is the best metric to use when accepting or rejecting a project?
INTERNAL RATE OF RETURN
NET PRESENT VALUE
PAYBACK
UP-FRONT COST
A cash budget should include:
DEPRECIATION
DISCOUNTS RECEIVED
CREDIT PURCHASES
NONE OF THE ABOVE
When do you record an expense as an outflow in the cash budget?
WHEN THE EXPENSE IS INCURRED
WHEN THE EXPENSE IS PAID IN CASH
WHEN THE EXPENSE IS PAID ON CREDIT
WHEN YOU CAN REASONABLY ESTIMATE THE OUTFLOW
How can companies cope with uncertainty in their cash budget?
PERFORM A SENSITIVITY ANALYSIS
HAVE AVAILABLE SHORT-TERM FINANCING OPTIONS
THEY WOULD NEED TO USE OTHER PLANNING TOOLS - CASH BUDGETS ARE NOT DESIGNED FOR THIS
BOTH A AND B
What is one advantage of bonds over stocks?
IT AVOIDS HAVING TO PAY BACK DEBT
CHEAPEST WAY TO FINANCE BIG CAPITAL PROJECTS
DOES NOT DILUTE THE OWNERSHIP OF THE COMPANY
DOES NOT REQUIRE WORKING WITH AN INVESTMENT BANK
Who usually owns preferred shares?
WEALTHY STOCK TRADERS
INVESTMENT BANKS
COMPANY FOUNDERS
CORPORATE BOND HOLDERS
Which type of company would likely have a high debt-to-equity ratio?
AN ESTABLISHED MINING COMPANY
A TECH START-UP
A FINANCIAL SERVICES FIRM
A SMALL NOT-FOR-PROFIT
Which type of company is the least likely to pay out a dividend?
A STRUGGLING COMPANY TRYING TO CONVINCE ITS SHAREHOLDERS NOT TO SELL
A NEW, FAST-GROWING COMPANY
A MATURE COMPANY AT ITS PEAK MARKET SHARE
A COMPANY WITH GROWING PROFITS YEAR OVER YEAR
Which of the following is one way a company can recoup some of the dividend payments?
THROUGH HIGH GROWTH IN PRICE
BY SIMPLY NOT PAYING A DIVIDEND
BY OFFERING A DIVIDEND REINVESTMENT PLAN
BY PAYING OUT THE SAME DIVIDEND EACH QUARTER
Which of the following would be considered a hostile takeover?
TWO MEDIUM-SIZED COMPANIES MERGING AFTER MONTHS OF NEGOCIATIONS TO BECOME A MARKET LEADER
THREE SMALL COMPANIES FORMING A STRATEGIC PARTNERSHIP IN THE DEVELOPMENT OF A NEW TECHNOLOGY
ONE LARGER COMPANY BUYING A SMALLER COMPANY AT 10% HIGHER THAN THE MARKET PRICE
ONE LARGER COMPANY BUYING A SMALLER COMPANY AT 50% HIGHER THAN THE MARKET PRICE
Solvency in a business is…
HOW WELL A BUSINESS CAN PAY ITS LONG TERM DEBTS BY REMAINING PROFITABLE
HOW WELL A BUSINESS CAN MANAGE ITS OPERATIONS BY BALANCING INCOME AND EXPENSES
HOW CAPABLE A BUSINESS IS WITH PAYING ALL OF ITS DEBTS RELATIVE TO ITS ASSETS
HOW WELL A BUSINESS CAN DISSOLVE IN A STRONG ACID
Why is Inventory less liquid than other types of assets?
INVENTORY STILL NEEDS TO BE SOLD, AND IT IS NOT KNOWN HOW QUICKLY A BUSINESS CAN DO THAT
IF THE INVENTORY IS SOLD, IT WOULD BE COUNTED AS OPERATING REVENUE, AND NOT PART OF THE SOLVENCY EQUATION
INVENTORY IS NOT CONSIDERED AN ASSET BECAUSE IT TAKES UP SPACE FOR STORAGE
INVENTORY CAN NEVER BE USED TO PAY OFF DEBTS
What is one legal way a company might change their assets on their balance sheet?
ACCELERATE DEPRECIATION TO DELAY TAX BURDENS
OVERVALUE ASSETS TO MAKE THE BUSINESS APPEAR MORE SOLVENT
UNDERVALUE ASSETS IN ORDER TO BOOST STOCK PRICE AFTER THE NEXT QUARTER
NONE OF THESE ARE LEGAL
If you wanted to estimate how much a stock's price will grow based on several other economic factors, which method will you us
P/E RATIO
P/S RATIO
ARBITRAGE PRICING THEORY
CAPITAL ASSET PRICING MODEL
Use the Capital Asset Pricing Model to calculate the expected return for Sprint (S), which has a current beta of 0.79771. Assume all other values are the same as our example above
BETWEEN 2.35% AND 3.5%
BETWEEN 3.5% AND 4.8%
BETWEEN 4.8% AND 6.1%
OVER 6.1%
Why would a company try to use a "Roundtrip Transfer"?
TO ARTIFICIALLY INFLATE EXPENSES, WHICH CAN BE WRITTEN OFF TAXES
TO ARTIFICIALLY INFLATE REVENUES, WHICH CAN INCREASE EXECUTIVE BONUSES
TO ARTIFICIALLY INFLATE PROFITS, MAKING THE BUSINESS LOOK MORE PROFITABLE TO INVESTORS
TO ARTIFICIALLY INFLATE LOSSES, WHICH HELPS AVOID PAYING DIVIDENDS
What is one regulation that works specifically to catch what LocatePlus was doing?
ALL FIRMS MUST HIRE INDEPENDENT AUDITORS TO REVIEW THE ACCOUNTING BOOKS ANNUALLY
THE IRS WILL AUDIT EVERY COMPANY WITH PUBLIC STOCK EVERY YEAR
CORPORATE EXECUTIVES CANNOT START OTHER BUSINESSES
ALL OF THE ABOVE
How can prosecutors prove intent?
SHOWING THE CRIME WAS COMMITTED AND THE ACCUSED DIRECTLY PROFITTED FROM IT
EMAIL CHAINS EXPLAINING THE PURPOSE OF THE FRAUDULENT COMPANY IS TO TRANSFER FUND
EYE-WITNESS TESTIMONY STATING THAT THE ACCUSED WAS TAKING PAYMENTS FROM A DIFFERENT COMPANY
NONE OF THE ABOVE
Managerial accountants are most concerned with…
INCOME STATEMENTS
BALANCE SHEETS
CASH FLOW STATEMENTS
COSTS
The "make or buy" decision is dominated by….
FIXED COSTS
VARIABLE COSTS
BOTH
THE RELATIONSHIP WITH THE BUYER
Why are managerial accountants concerned with Cost Allocation?
BECAUSE PROFITS PER UNIT CAN ONLY BE DETERMINED WITH AN ACCURATE COST PER UNIT
IDENTIFYING PROPER COST ALLOCATION HELPS IDENTIFY WASTAGE THAT CAN BE ELIMINATED
TO ALLOCATE COSTS BETWEEN AREAS WITH DIFFERENT TAX LEVELS
ALL OF THE ABOVE
Which of the following financial statements is not required to be included in the 10k filing?
INCOME STATEMENT
RETAINED EARNINGS STATEMENT
CASH FLOW STATEMENT
BALANCE SHEET
Which of the following financial statements looks at a company's activities over a period of time, not at a specific moment?
INCOME STATEMENT
STATEMENT OF SHAREHOLDER EQUITY
BALANCE SHEET
RETAINED EARNINGS STATEMENT
Which is the last financial statement to be prepared?
INCOME STATEMENT
BALANCE SHEET
CASH FLOW STATEMENT
STATEMENT OF SHAREHOLDER EQUITY
How do managers determine indirect cost allocation?
COST DRIVERS UNIQUE TO THE PRODUCTION PROCESS
MACHINE HOURS
FLOOR SPACE USAGE
NUMBER OF MANAGERIAL STAFF
Why is Cost Accounting not included in financial statements?
IT IS NOT GAAP-COMPLIANT
IT CONTAINS SENSITIVE INFORMATION CONFIDENTIAL TO THE COMPANY'S MANAGEMENT STAFF
IT IS DIFFERENT FOR EACH BUSINESS, SO TWO BUSINESS'S COST ACCOUNTING CANNOT BE DIRECTLY COMPARED LIKE FINANCIAL STATEMENTS
ALL OF THE ABOVE
If you were to plot the variable cost per unit on a graph (with cost on the vertical axis, and output on the horizontal axis), what shape would it make?
A FLAT LINE
A DOWNWARD-SLOPING LINE
AN UPWARD-SLOPING LINE
A U SHAPE
If you know a brand so well that you use its trademark name to describe all similar products, you are exhibiting…
BRAND AWARENESS
BRAND LOYALTY
PROMOTION AWARENESS
PROMOTION SUSCEPTIBILITY
Which of the following items is not one of the elements of the "Marketing Mix"?
PRODUCTS
PRICING
PEOPLE
PROMOTIONS
Marketers need to measure the success of their marketing campaigns. Which of the following types of campaigns is the most difficult to accurately report?
BUSINESS TO CONSUMER
BUSINESS TO BUSINESS
BUSINESS TO NON-PROFIT
NON-PROFIT TO CONSUMER
What is the primary objective while a loss is in progress?
Minimizing the damage and preventing the loss from increasing
EXAMINING WHAT CAUSED THE LOSS TO PREVENT IT FROM HAPPENING AGAIN
RESTRUCTURE THE LEADERSHIP AT A COMPANY TO BEST ADDRESS THE LOSS
TRY TO AVOID THE LOSS FROM HAPPENING
Which of the following would be considered a "redistributing" control?
ADDING A TRAINING SESSION ACROSS MULTIPLE DEPARTMENTS TO PREVENT THE PROBLEM FROM OCCURRING
HAVING MULTIPLE WAREHOUSES AND FACTORIES TO ENSURE A LOSS AT ONE DOES NOT STOP ALL OPERATIONS
BUYING AN INSURANCE POLICY TO OFFSET THE LOSS IF IT OCCURS
IMPLEMENTING A FIRE SPRINKLER SYSTEM BY HIRING ANOTHER COMPANY TO INSTALL IT
A lawsuit due to negligence is what type of legal risk?
CRIMINAL
CONTRACTUAL
TORT
NONE OF THE ABOVE
Which tax is paid only by the employer, not the employee?
FICA TAXES
SOCIAL SECURITY ONLY
MEDICARE ONLY
FEDERAL UNEMPLOYMENT INSURANCE
Why would an employer pay more in unemployment insurance costs than FICA?
MANY LOW-PAY TEMP WORKERS
USES MOSTLY CONTRACTORS WITH VERY FEW EMPLOYEES ON PAYROLL
THE CEO MAKES MORE THAN 20 TIMES THE AVERAGE COMPANY SALARY
THE COMPANY RECENTLY LAID OFF MANY EMPLOYEES, SO THEIR UNEMPLOYMENT INSURANCE PREMIUMS GO UP
Which of the following payroll taxes does not have a cap?
SOCIAL SECURITY
MEDICARE
FEDERAL UNEMPLOYMENT
STATE UNEMPLOYMENT
