Question 1

Your boss asks you to e-mail a spreadsheet that shows how much money came into the company and how much money the company spent last month.When sending the e-mail,you MOST LIKELY will attach the file named ________.

Accepted Answer

An income statement shows the revenue earned and expenses incurred by a company during a given period of time, such as a month. It is the best choice for showing how much money came into the company and how much was spent during the previous month. The other options are financial reports that show different aspects of a company's financial situation, but they do not specifically provide the information requested by the boss.

Question 2

Your boss asks you to e-mail a spreadsheet that shows the exchange of money between the company and everyone else it deals with over a period of time.When sending the e-mail,you MOST LIKELY will attach the file named ________.

Accepted Answer

The spreadsheet showing the exchange of money between the company and external entities over a period of time is likely to contain information on cash inflows and outflows. Therefore, the most appropriate file to send would be the Statement of Cash Flows, which provides a summary of a company’s cash transactions for a given accounting period. The other options are less relevant as they relate to different aspects of a company’s financial position and performance.

Question 3

Susan Capelongo manages a department that prepares financial statements to be sent to current and potential stockholders.Susan works in ________.

Accepted Answer

Susan Capelongo manages a department that prepares financial statements for stockholders, indicating that she works in corporate accounting.

Question 4

Your boss asks you to e-mail a spreadsheet that shows what the company owns and what it has borrowed (owes)at a fixed point in time and shows the net worth of the business.When sending the e-mail,you MOST LIKELY will attach the file named ________.

Accepted Answer

A balance sheet shows the assets, liabilities, and equity of a company at a fixed point in time. It provides a snapshot of the financial position of the business and shows what it owns, owes, and its net worth. Therefore, it is the most appropriate document to attach when sending an email that requires such information. Options A, B, D, and E are not as relevant in this context.

Question 5

Short-term liabilities are obligations a company is responsible for paying ________.

Accepted Answer

Short-term liabilities are typically due within a year or less, making option C the correct answer. Other options (A, B, D, and E) are not accurate as they refer to timeframes that exceed or do not meet the typical definition of short-term liabilities.

Question 6

Adam Zarand wants to help his company decide whether or not to shut down an unproductive plant.Which type of accounting will he MOST LIKELY use?

Accepted Answer

Managerial accounting focuses on providing information to internal management teams in order to assist with decision-making processes. In this case, Adam Zarand is trying to determine whether or not to shut down a plant, which falls under the realm of managerial accounting. Tax accounting deals with tax regulations and compliance, government accounting is used by government entities, and financial accounting focuses on providing financial information to external stakeholders.

Question 7

The clothing and accessories at New Fashion Stores,Inc.are an example of ________ assets.

Accepted Answer

Current assets are assets that can easily convert to cash within one year or less, and the clothing and accessories at New Fashion Stores, Inc. are current assets as they are inventory that will be sold within a year.

Question 8

In her work as an accountant,Sandra Garcia recognizes that for every transaction that affects an asset,an equal transaction must also affect either a liability or owners' equity.Sandra is using ________ bookkeeping.

Accepted Answer

Sandra is using double entry bookkeeping. This system of accounting requires that for every transaction, there must be a corresponding entry in at least two accounts - one account will be debited and another account will be credited. This ensures that the accounting equation (assets = liabilities + equity) remains balanced. Therefore, option B - double entry - is the correct answer. Options A, C, D and E are not relevant to the concept described.

Question 9

Mark Lewis manages a corporate department that reviews and evaluates the accuracy of financial reports.Mark works in ________.

Accepted Answer

Mark Lewis is managing a department that reviews and evaluates the accuracy of financial reports, which falls under auditing, making A the best choice for this scenario. Tax accounting, not-for-profit accounting, government accounting, and managerial accounting all have different functions and responsibilities that do not precisely match Mark's role.

Question 10

FASB stands for ________.

Accepted Answer

FASB stands for Financial Accounting Standard Board. The other options are incorrect and do not fit the acronym.

Question 11

Tracking a business's income and expenses through a process of recording financial transactions is called ________.

Accepted Answer

Accounting is the process of tracking a business's income and expenses through recording financial transactions. Sales, production, strategy, and budgeting are all important aspects of a business, but they are not specific to the process of recording financial transactions.

Question 12

Liquidity is the speed at which assets can be turned into ________.

Accepted Answer

Liquidity refers to the ease and speed at which assets can be converted into cash. Therefore, the correct choice is B - cash.

Question 13

Accounting is important for ________.

Accepted Answer

Accounting is important for organizations of all sizes and types, including large and small businesses, for-profit and non-profit organizations, and even individuals. Accounting helps to track and analyze financial information, make informed business decisions, and ensure legal and regulatory compliance.

Question 14

Kay Alden manages a department that prepares annual reports.Kay works in ________.

Accepted Answer

Kay Alden prepares annual reports, which are a financial statement. Thus, she is working in financial accounting.

Question 15

Short-term liabilities are also known as ________ liabilities.

Accepted Answer

Short-term liabilities refer to debts or obligations that are due within one year or less, and they are also known as current liabilities. Current liabilities include accounts payable, accrued expenses, and short-term loans or lines of credit. Fixed and debenture liabilities are long-term liabilities, and instant and past-due liabilities are not commonly used terms to describe liabilities in accounting.

Question 16

Assets = Liabilities + Owners' Equity is the fundamental ________ equation.

Accepted Answer

The equation Assets = Liabilities + Owners' Equity is the fundamental accounting equation, which represents how a company's resources (assets) are financed through either debt (liabilities) or equity (owners' equity).

Question 17

A common leverage ratio is for a company to have at least ________ times the amount of equity as it has debt.

Accepted Answer

A common leverage ratio that is considered healthy for a company is to have at least two times the amount of equity as it has debt. This indicates a strong balance sheet and financial stability.

Question 18

Iris Velez manages a department that calculates payments to be made to federal,state,and local governments.Iris works in ________.

Accepted Answer

Iris's job involves calculating payments to be made to various government entities, which falls under the scope of tax accounting.

Question 19

The amounts that New Fashion Stores,Inc.owes to clothing manufacturers are an example of ________.

Accepted Answer

The amounts owed to clothing manufacturers are debts that New Fashion Stores, Inc. has yet to pay, making them liabilities.

Question 20

Accounting involves a great deal of precision and some degrees of interpretation; therefore,accounting is ________.

Accepted Answer

Accounting involves both an element of subjective interpretation and objective scientific measurement. Therefore, it can be considered both an art and a science. The precision required in accounting reflects its scientific nature, while the judgment calls and estimations made by accountants demonstrate its artistic aspects.

Quiz 15: Financing and Tracking Business Operations