Question 1

Bernie calls his accountant to determine how much money his company owes to its supplier of raw materials. He should ask his accountant to provide him with the company's balance sheet.

Accepted Answer

The balance sheet shows the company's assets, liabilities, and equity at a specific point in time. It can be used to determine how much money the company owes to its suppliers.

Question 2

Balance sheets reflect three key terms in the accounting equation: assets, liabilities, and cost of goods sold.

Accepted Answer

Balance sheets reflect three key terms in the accounting equation: assets, liabilities, and equity. Cost of goods sold is reflected on the income statement.

Question 3

The purpose of generally accepted accounting principles (GAAP) is to ensure that financial statements are relevant, reliable, consistent, and comparable.

Accepted Answer

The purpose of GAAP is indeed to ensure that financial statements are relevant, reliable, consistent, and comparable. This helps ensure that investors, lenders, and other users of financial information can make informed decisions based on accurate and consistent financial data.

Question 4

Iang aai bnsatl atnhcee a sshseetest ,o of w thnee rfsir' meq. uity indicates the claims a firm's owners have

Accepted Answer

The statement is true. Retained earnings, in addition to common and preferred stock, are examples of sources of equity for a firm's owners. The total equity represents the claims that owners have on the company's assets.

Question 5

Assets = Liabilities + Net Income.

Accepted Answer

The correct formula is Assets = Liabilities + Equity. Net income is part of equity, not a separate component.

Question 6

Current liabilities are debts that come due within a year of the date on the balance sheet.

Accepted Answer

Current liabilities are typically due within one year of the date of the balance sheet, including items such as accounts payable, short-term loans, and accrued expenses.

Question 7

A balance sheet summarizes the financial position of a firm at a particular point in time by identifying and reporting the value of the firm's assets, liabilities, and owners' equity.

Accepted Answer

This statement is true. A balance sheet shows the assets, liabilities, and equity of a business at a given moment in time.

Question 8

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) work together to find ways to make U.S. accounting practices more consistent with those in other nations.

Accepted Answer

The statement is true. FASB and IASB collaborate to achieve convergence of accounting standards.

Question 9

According to the accounting equation, the value of a firm's assets should be less than the financing provided by the creditors and the owners of the firm.

Accepted Answer

According to the accounting equation, the value of a firm's assets should be equal to the financing provided by the creditors and the owners of the firm. Therefore, the value of assets should be balanced by liabilities (creditors) and equity (owners). The equation is Assets = Liabilities + Equity.

Question 10

Liabilities do not include bank loans and current payments owed to suppliers.

Accepted Answer

Liabilities do include bank loans and current payments owed to suppliers.

Question 11

The Taylix Company's balance sheet showed $18,000,000 in assets and $10,000,000 in liabilities. From the given information, the firm's owners' equity equals $6,000,000.

Accepted Answer

The owners' equity is calculated as assets minus liabilities, which equals $8,000,000 ($18,000,000 - $10,000,000).

Question 12

It is mandatory for all members of the Financial Accounting Standards Board (FASB) to sever all ties with any firms or institutions they served prior to joining the board.

Accepted Answer

This is true. Members of the FASB are required to sever all ties with any firms or institutions they previously served before joining the board to ensure independence and avoid conflicts of interest.

Question 13

Due to accounting scandals, many state accounting boards have imposed new ethics­related requirements.

Accepted Answer

Many state accounting boards have indeed imposed new ethics-related requirements in response to accounting scandals. These requirements may include additional ethics training, background checks, and continuing education on ethical best practices.

Question 14

Accounts payable are listed under assets on a balance sheet.

Accepted Answer

Accounts payable are liabilities, not assets. They represent payments that a company owes to its vendors or suppliers. Therefore, they are listed under liabilities on a balance sheet, not assets.

Question 15

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Accepted Answer

The members of the Financial Accounting Standards Board (FASB) are appointed by the Financial Accounting Foundation (FAF), not the Securities and Exchange Commission (SEC).

Question 16

Rosalyn owns stock in Parts, Parts, and More, Inc. and has just received the company's annual report. If she wants to see the total value of Parts, Parts, and More's assets, she should look at the company's balance sheet.

Accepted Answer

The balance sheet shows a company's assets, liabilities, and equity, including the total value of its assets.

Question 17

Since it deals strictly with numbers, the practice of accounting is free from ethical obligations.

Accepted Answer

While accounting is focused on numbers, it is still subject to ethical obligations. Accountants are responsible for maintaining accurate financial records and providing unbiased advice to their clients or employers. They are also obligated to follow professional standards of conduct and to prioritize their clients' best interests. Failure to adhere to these ethical obligations can result in legal and reputational consequences.

Question 18

Copyrights and trademarks are tangible assets.

Accepted Answer

Copyrights and trademarks are considered intangible assets because they are non-physical and represent legal rights or privileges.

Question 19

The Financial Accounting Standards Board comprises ten members, with each member serving a three­year term.

Accepted Answer

The Financial Accounting Standards Board (FASB) comprises seven members, each serving a five-year term, with the possibility of reappointment for an additional five-year term.

Question 20

Assets are the tangible and intangible resources owned by a firm.

Accepted Answer

Assets can include physical property such as land, buildings, and equipment, as well as intellectual property, such as patents and trademarks.

Quiz 8: Accounting: Decision Making by the Numbers

Bernie calls his accountant to determine how much money his company owes to its supplier of raw materials. He should ask his accountant to provide him with the company's balance sheet.

Balance sheets reflect three key terms in the accounting equation: assets, liabilities, and cost of goods sold.

The purpose of generally accepted accounting principles (GAAP) is to ensure that financial statements are relevant, reliable, consistent, and comparable.

Iang aai bnsatl atnhcee a sshseetest ,o of w thnee rfsir' meq. uity indicates the claims a firm's owners have

Assets = Liabilities + Net Income.

Current liabilities are debts that come due within a year of the date on the balance sheet.

A balance sheet summarizes the financial position of a firm at a particular point in time by identifying and reporting the value of the firm's assets, liabilities, and owners' equity.

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) work together to find ways to make U.S. accounting practices more consistent with those in other nations.

According to the accounting equation, the value of a firm's assets should be less than the financing provided by the creditors and the owners of the firm.

Liabilities do not include bank loans and current payments owed to suppliers.

The Taylix Company's balance sheet showed $18,000,000 in assets and $10,000,000 in liabilities. From the given information, the firm's owners' equity equals $6,000,000.

It is mandatory for all members of the Financial Accounting Standards Board (FASB) to sever all ties with any firms or institutions they served prior to joining the board.

Due to accounting scandals, many state accounting boards have imposed new ethicsrelated requirements.

Accounts payable are listed under assets on a balance sheet.

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Rosalyn owns stock in Parts, Parts, and More, Inc. and has just received the company's annual report. If she wants to see the total value of Parts, Parts, and More's assets, she should look at the company's balance sheet.

Since it deals strictly with numbers, the practice of accounting is free from ethical obligations.

Copyrights and trademarks are tangible assets.

The Financial Accounting Standards Board comprises ten members, with each member serving a threeyear term.

Assets are the tangible and intangible resources owned by a firm.

Quiz 8: Accounting: Decision Making by the Numbers

Bernie calls his accountant to determine how much money his company owes to its supplier of raw materials. He should ask his accountant to provide him with the company's balance sheet.

Balance sheets reflect three key terms in the accounting equation: assets, liabilities, and cost of goods sold.

The purpose of generally accepted accounting principles (GAAP) is to ensure that financial statements are relevant, reliable, consistent, and comparable.

Iang aai bnsatl atnhcee a sshseetest ,o of w thnee rfsir' meq. uity indicates the claims a firm's owners have

Assets = Liabilities + Net Income.

Current liabilities are debts that come due within a year of the date on the balance sheet.

A balance sheet summarizes the financial position of a firm at a particular point in time by identifying and reporting the value of the firm's assets, liabilities, and owners' equity.

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) work together to find ways to make U.S. accounting practices more consistent with those in other nations.

According to the accounting equation, the value of a firm's assets should be less than the financing provided by the creditors and the owners of the firm.

Liabilities do not include bank loans and current payments owed to suppliers.

The Taylix Company's balance sheet showed $18,000,000 in assets and $10,000,000 in liabilities. From the given information, the firm's owners' equity equals $6,000,000.

It is mandatory for all members of the Financial Accounting Standards Board (FASB) to sever all ties with any firms or institutions they served prior to joining the board.

Due to accounting scandals, many state accounting boards have imposed new ethics­related requirements.

Accounts payable are listed under assets on a balance sheet.

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission.

Rosalyn owns stock in Parts, Parts, and More, Inc. and has just received the company's annual report. If she wants to see the total value of Parts, Parts, and More's assets, she should look at the company's balance sheet.

Since it deals strictly with numbers, the practice of accounting is free from ethical obligations.

Copyrights and trademarks are tangible assets.

The Financial Accounting Standards Board comprises ten members, with each member serving a three­year term.

Assets are the tangible and intangible resources owned by a firm.

Due to accounting scandals, many state accounting boards have imposed new ethicsrelated requirements.

The Financial Accounting Standards Board comprises ten members, with each member serving a threeyear term.