Font size
WorksheetsChapter 8 Accounting Review
Total questions: 36
Worksheet time: 3hrs 0mins
What is a system for recognizing, organizing, analyzing, and reporting information about the financial transactions that affect an organization?
Auditing
Marketing
Management
Accounting
Who are the key users of accounting information?
Managers, Stockholders, Employees, Creditors, Suppliers, Government
Customers, Competitors, Media, Public
Only Managers and Employees
Only Stockholders and Creditors
What are three types of roles accountants fill?
Public accountant, Management accountant, Government accountant
Financial analyst, Marketing manager, Sales executive
HR manager, IT specialist, Operations manager
Legal advisor, Compliance officer, Risk manager
What are the requirements to become a (CPA) Certified public accountant in most states?
50 semester hours, pass a four-part test
100 semester hours, pass a two-part test, two years of experience
200 semester hours, pass a three-part test, no experience required
150 semester hours, pass a four-part test, one year of experience
What is the branch of accounting that prepares financial statements for use by owners, creditors, suppliers, and other external stakeholders?
Managerial accounting
Financial accounting
Tax accounting
Cost accounting
What is a set of accounting standards that is used in the preparation of financial statements?
Generally accepted accounting principles (GAAP)
International Financial Reporting Standards (IFRS)
Financial Accounting Standards Board (FASB)
Certified Public Accountant (CPA)
What is the private board that establishes the generally accepted accounting principles used in the practice of accounting?
Financial Accounting Standards Board (FASB)
International Accounting Standards Board (IASB)
American Institute of CPAs (AICPA)
Securities and Exchange Commission (SEC)
Through GAAP, what does the FASB aim to ensure that financial statements are?
Detailed, Concise, Flexible, Secure
Accurate, Timely, Comprehensive, Understandable
Relevant, Reliable, Consistent, Comparable
Innovative, Strategic, Dynamic, Efficient
What is the financial statement that reports the financial position of a firm by identifying and reporting the value of the firm’s assets, liabilities, and owners equity?
Statement of Retained Earnings
Income Statement
Cash Flow Statement
Balance Sheet
What is the accounting equation?
Assets = Liabilities - Owners Equity
Assets = Revenue - Expenses
Assets = Liabilities + Owners Equity
Assets = Income + Expenses
What are resources owned by a firm called?
Liabilities
Expenses
Assets
Revenue
What are claims that outsiders have against a firm's assets?
Assets
Liabilities
Revenue
Expenses
What is the financial statement that reports the revenues, expenses, and net income that resulted from a firm's operation over an accounting period?
Balance sheet
Statement of cash flows
Income statement
Statement of retained earnings
What are increases in a firm's assets that result from the sale of goods, provision of services, or other activities intended to earn income?
Liabilities
Revenue
Expenses
Assets
What is a method of accounting that recognizes revenue when it is earned and matches expenses to the revenues they helped produce?
Cash-basis accounting
Accrual-basis accounting
Managerial accounting
Financial accounting
What are resources that are used up as the result of business operations?
Assets
Liabilities
Revenue
Expenses
What is the difference between the revenue a firm earns and the expenses it incurs in a given time period, if revenue is larger than expenses?
Gross Income
Net Income
Operating Income
Total Revenue
What is the financial statement that identifies a firm's sources and uses of cash in a given accounting period?
Income statement
Balance sheet
Statement of cash flows
Statement of retained earnings
What is the purpose of an audit?
To increase revenue
To verify that a company's financial statements were properly prepared in accordance with GAAP
To reduce expenses
To improve employee performance
What is an analysis of financial statements that compares account values reported on these financial statements over two or more years to identify changes and trends?
Vertical analysis
Ratio analysis
Horizontal analysis
Break-even analysis
What is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period?
Forecasting
Budgeting
Auditing
Planning
What are four things that budgeting offers if done well?
Helps managers specify how they will achieve goals
Encourages communication and coordination among managers
Serves as a motivational tool
Helps managers evaluate programs
What is top down budgeting?
Middle managers prepare the budget
Employees prepare the budget
Management prepares the budget without input from middle managers or supervisors
Supervisors prepare the budget
What is bottom up budgeting?
Top management prepares the budget
Middle managers and supervisors participate in creating the budget
Employees prepare the budget
External consultants prepare the budget
What is a budget that communicates an organization's sales and production goals and the resources needed to achieve these goals?
Operating budget
Financial budget
Master budget
Managerial budget
What is a budget that focuses on the firm’s financial goals and identifies the resources needed to achieve those goals?
Master budget
Operating budget
Financial budget
Managerial budget
What is a presentation of an organization’s operational and financial budgets that represents the firm’s overall plan of action for a specified time period?
Master budget
Operating budget
Financial budget
Managerial budget
What is the branch of accounting that provides reports and analysis to managers to help them make informed business decisions?
Managerial accounting
Financial accounting
Cost accounting
Tax accounting
What is the value of what is given up in exchange for something?
Revenue
Cost
Profit
Expense
What is a cost that involves the payment of money or other resources, also called explicit costs?
Out of pocket cost
Implicit cost
Fixed cost
Variable cost
What is another name for the opportunity cost that arises when a firm uses owner supplied resources?
explicit costs
Implicit costs
Fixed costs
Variable costs
What is a cost that remains the same when the level of production changes within some relevant range?
Fixed cost
Variable cost
Direct cost
Indirect cost
What are the costs that vary directly with the level of production?
Indirect costs
Fixed costs
Direct costs
Variable costs
What are costs that are incurred directly as a result of some specific cost object?
Direct costs
Indirect costs
Fixed costs
Variable costs
What are costs that are the result of a firm’s general operations and are not directly tied to any specific cost project?
Direct costs
Indirect costs
Fixed costs
Variable costs
What is a technique to assign product costs based on links between activities that drive costs and the production of specific products?
(ABC) Activity based costing
(JOC) Job order costing
(PC) Process costing
(SC) Standard costing
