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Exam 3 Review - Ch. 14-16

Total questions: 59

Worksheet time: 32mins

Name
Class
Date
1.

Who uses accounting?

a)

Schools

b)

Hospitals

c)

Accountants

d)

businesses, hospitals, schools, government agencies, and civic groups—use accounting procedures

2.
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
None of These
3.
The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
Cash Statement
4.
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Equity
5.
Obligations (amounts owed) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Debt
d)
Owner Equity
6.
Revenues minus expenses equals:
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Net Income
7.
The Accounting Equation must always be in balance? 
a)
True
b)
False
8.
Assets 
a)
Anything owed by the company
b)
Anything owned of value by the company
9.
Supplies purchased on account that will be paid for at a later date is a liability.
a)
True
b)
False
10.
The owner's worth after assets are used to pay all liabilities is the definition of
a)
Owner's Equity
b)
Liabilities
c)
Assets
11.
Financial reports that summarize the financial condition and operations of a business
a)
financial statements
b)
ethics
c)
withdrawals
d)
equities
12.
Revenues minus expenses equals _____________________.
(Revenues-Expenses = _______________)
a)
Profit
b)
Overhead
c)
Income
d)
None of the above
13.

FASB - The Financial Accounting Standards Board (FASB) is a public organization that is responsible for establishing financial accounting standards used in the United States.

a)

True its a public organization

b)

False its a private Organization

14.

GAPP - To ensure accuracy and consistency in the way financial information is reported, accountants in the United States follow generally accepted accounting principles (GAAP) when preparing financial statements. 

a)

True

b)

False

15.
What is owner's equity? 
a)
The amount of money the owner's has
b)
The stock options 
c)
The assets 
d)
The assets minus the liabilities of a business 
16.

_____ _____ provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations. 

a)

General Accounting

b)

Managerial Accounting

c)

Financial Accounting

d)

Corporate Accounting

17.

The process of recording, summarizing, and analyzing financial transactions is known as _______________.

a)

Accounting

b)

Auditing

c)

Budgeting

d)

Economics

18.

Which financial statement displays the income and expenses over a period of time?

a)

Balance Sheet

b)

Income Statement

c)

Cash Flow Statement

d)

Equity Statement

19.

What is this equation known as? Assets−Liabilities=Owners' equity

a)

Accounting Equation

b)

Balance Equation

c)

Income Equation

d)

Cash Flow Equation

20.

How many steps are there in the accounting cycle?

a)

2

b)

4

c)

6

d)

8

21.

What is a CPA?

a)

certified public accountant

b)

certified profit analysist

c)

certified professional accountant

d)

certified professional analysist

22.

What is the formula for calculating net income?

a)

Assets + Liabilities

b)

Revenues - Expenses

c)

Assets - Liabilities

d)

Cash Inflow - Cash Outflow

23.

What are the three primary financial statements included in the annual report?

a)

Profit and Loss Statement, The Statement of Cash Flows, and Balance Sheet

b)

The Statement of Cash Flows, Account Statement and Income Statement

c)

Income Statement, Balance Sheet, and Statement of Cash Flows

d)

Account Statement, Balance Sheet, and Statement of Cash Flows

24.

What is the purpose of the statement of cash flows?

a)

Net profit or loss is one measure of a company’s financial performance.

b)

The statement of cash flows, a summary of the money flowing into and out of a firm, is the financial statement used to assess the sources and uses of cash during a certain period, typically one year.

c)

It gives financial managers and analysts a way to identify cash flow problems and assess the firm’s financial viability.

d)

All of the Above

25.

Which of the following are roles of a financial manager?

a)

Work on teams, acting as business advisers to top executives.

b)

Financial managers’ main responsibility used to be monitoring a company’s finances.

c)

Do data analysis and advise senior managers on ideas to maximize profits.

26.

What is the role of a financial manager?

a)

someone who has no decision making power in the business, but oversees the financial reports

b)

To maximize the firm’s value, the financial manager has to consider both short- and long-term consequences of the firm’s actions.

c)

someone who strictly prepares all of the documents.

27.

Which organization is responsible for enforcing federal securities laws and regulating the securities industry?

a)

The Federal Reserve

b)

The Securities and Exchange Commission (SEC)

c)

The Financial Industry Regulatory Authority (FINRA)

d)

The National Association of Securities Dealers (NASD)

28.

What is the primary function of the Financial Industry Regulatory Authority (FINRA)?

a)

To provide banking services to the securities industry

b)

To oversee the stock exchanges

c)

To protect investors by maintaining fair market practices

d)

To issue new securities regulations

29.

How do self-regulatory organizations (SROs) like FINRA contribute to the regulation of the securities industry?

a)

By providing financial support to the securities industry

b)

By directly managing the operations of securities firms

c)

By creating and enforcing rules for ethical and fair practices among their members

d)

By lobbying for legislative changes in the securities industry

30.
National Association of Securities Dealers Automated Quotations, or NASDAQ,
a)
uses the same trading system as the NYSE.
b)
uses a computer automated system for trading
c)
uses ebay to help make the trades
d)
uses stockbrokers in conjunction with the Dow to make trades
31.
What is NASDAQ?
a)
The biggest stock market in the world
b)
What stocks are called when they are bought and sold
c)
Certificates certifying you own a stock
d)
An automated system for trading stocks
32.
What is a stock?
a)
A part of a share of showing profit in a company
b)
A document that states you are worth a lot of money
c)
A person who buys things for you
d)
A document that represents ownership in a company
33.
If there is a low demand for a stock the price of that stock will ...
a)
Rise
b)
*Fall
c)
not Change
d)
Can't determine
34.
What is the goal of an investor?
a)
Buy low and sell high
b)
Keep a stock for their entire life
c)
Open a new investment account
d)
Help a company get bigger
35.
If lots of people decide to sell the same stock and few people want the stock, the price of that stock will likely...
a)
Rise
b)
Fall
c)
Unchange
d)
depends on prices
36.
How far back can stocks be traced?
a)
California Gold Rush - 100 years ago
b)
American Revolution - 200 years ago
c)
1901 - 100 years ago
d)
1970 - 80 years ago
37.
The NYSE is an exchange where daily auctions (the biding of stocks) determine the price for thousands of different stocks.
a)
True
b)
False
38.
What are stock shares?
a)
Certificate showing partial ownership of a company
b)
Certificate showing a company's retirement system
c)
Certificate showing a company's dividends
d)
Certificate showing a company's income
39.
Commission on stocks are paid to who?
a)
Stock market
b)
Stock holder
c)
Stock exchange
d)
Stock broker
40.
What ultimately determines the price of a particular stock?
a)
Computers
b)
Parents
c)
Shares
d)
Supply and Demand
41.
What is the primary reason why companies issue stocks?
a)
To raise extra money for the company
b)
To provide for their employee's retirements
c)
To guarantee the success of a new product
d)
To ensure a stable market
42.
Stocks are a share of ownership in a company and a person who owns one or more shares of stock is called a ...
a)
Securities
b)
Broker
c)
Stock Holder
d)
Dividend
43.

a reasonably interchangeable good or material, bought and sold freely as an article of commerce

a)

commodity

b)

shares

c)

securities

44.

person who serves as a trusted agent or intermediary in commercial negotiations or transactions

a)

broker

b)

investor

c)

shareholder

45.

a share of the after-tax profit of a company, distributed to its shareholders

a)

dividends

b)

share

c)

equity

46.

For a firm to have its securities listed on an exchange, it must meet certain requirements. These usually include measures of profitability, size, market value, and public ownership.

a)

TRUE

b)

FALSE

47.
Where do Banks get the money they use to loan out to others?
a)
The Government
b)
The Federal Reserve
c)
Other Banks
d)
The Savings of Depositers
48.
What category do Private Financial Institutions fall under?
a)
Goods and Services
b)
Public Goods and Services
49.
How do Private Financial Institutions make a profit?
a)
The Government pays them
b)
Charging interest on loans
50.
What does Inflation do to the value of money?
a)
Makes it go up.
b)
Makes it go down.
c)
Makes it stay the same.
51.
Which of the following is a job of the Federal Reserve?
a)
Insure the safety of deposits.
b)
Regulate inflation so it doesn't get out of control.
c)
Acts as the Governments Bank.
d)
All of the above.
52.
Which of the following is an example of a Private Financial Institution?
a)
Walmart
b)
Best Buy
c)
Wells Fargo
d)
The Federal Reserve
53.
This image represents which of the following economic concepts?
a)
Competition
b)
Consumption
c)
Production
d)
Profit
54.

Economists use two terms to report on and discuss trends in the U.S. monetary system:

a)

M1 and E1

b)

M2 and E1

c)

E1 and E2

d)

M1 and M2

55.
Which of the following is a tax that is taken on the money you earn from the job you preform?
a)
Sales tax
b)
Social Security Tax
c)
Income Tax
d)
Estate Tax
56.
Why do we pay taxes in our country?
a)
To make our Government rich.
b)
To provide for Public Goods and Services.
c)
To provide for Goods and Services.
57.

Time deposits are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand. Examples are certain savings accounts, money market deposit accounts, and certificates of deposit.

a)

True

b)

False

58.
What is the number of electoral votes for each state based on?
a)
Population
b)
Congressional Representation
c)
Number of registered voters in the state
d)
How long that state has been part of the United States.
59.

Demand deposits consists of

a)

money kept in checking accounts to be withdrawn on demand

b)

Interest bearing accounts

c)

and other special types of accoutns

d)

All of the above.

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