Question 1

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

Accepted Answer

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Question 2

Brown manages the sales force for his company.He is engaged in the _____ activity.
A)operating
B)accounting
C)financing
D)investing

Accepted Answer

Managing the sales force falls under the operating activities of a business. Operating activities involve the day-to-day activities of a company that generate revenue and expenses. Sales management is an important operating activity as it involves activities such as setting sales targets, motivating the sales force, and monitoring sales performance. Accounting, financing, and investing activities are not directly related to managing the sales force.

Question 3

Discuss how forensic accounting helps fight crime in today's business world and illustrate using examples.

Accepted Answer

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Question 4

Describe the purpose of budgets in a business.

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Question 5

_____ activities focus on providing valuable assets to a business.
A)Marketing
B)Investing
C)Selling
D)Operating

Accepted Answer

Investing activities involve acquiring and disposing of long-term assets, such as property, plant, and equipment, which can provide valuable assets to a business over time. Marketing activities may generate leads or promote a business, but they do not directly provide assets to the business. Selling and operating activities may generate revenue for the business, but they do not necessarily focus on providing valuable assets.

Question 6

Mitchell works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Mitchell's job?
A)Market researcher
B)Systems analyst
C)Investor
D)Accountant

Accepted Answer

Mitchell's job involves preparing financial reports and interpreting those reports, which is the primary role of an accountant. The other options do not match the specific job responsibilities mentioned.

Question 7

_____ activities provide the necessary funds to start a business and to expand it after it begins operations.
A)Selling
B)Financing
C)Operating
D)Investing

Accepted Answer

Financing activities usually involve obtaining funds through loans, issuing stocks, or selling bonds to raise capital for starting or expanding a business. Selling activities are more related to generating revenue from selling products or services. Operating activities are the regular day-to-day activities of a business, like paying wages, purchasing raw materials, and paying bills. Investing activities refer to using the available funds to invest in assets that will bring future benefits, such as purchasing property or buying stocks.

Question 8

The natural progression of a business begins with _____.
A)operating
B)investing
C)financing
D)selling

Accepted Answer

The natural progression of a business typically begins with financing, where the business seeks capital or funding to start operations, invest in assets, or cover initial expenses.

Question 9

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are known as _____.
A)statisticians
B)accountants
C)IRS agents
D)IRS agents' managers

Accepted Answer

Accountants are specifically trained and responsible for gathering, recording, reporting, and interpreting financial information for an organization. While statisticians may work with data, their role is not solely focused on financial data. IRS agents and their managers work for the government and are responsible for enforcing tax laws, not necessarily recording and interpreting financial information for a private organization.

Question 10

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Walker is most interested in using this information _____.
A)to plan and control daily operations
B)in contract negotiations
C)to make an investment decision and estimate its future returns
D)to evaluate financial soundness of potential clients

Accepted Answer

As a loan officer, Walker's main concern is evaluating the financial soundness of potential clients to determine their ability to repay the loan. Therefore, option D is the best choice. Option A pertains to operational management, option B is more relevant to legal or contractual matters, and option C is more suitable for investors rather than loan officers.

Question 11

Discuss the responsibilities of accountants and auditors.

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Question 12

What is the purpose of the balance sheet? Explain how it is organized.

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Question 13

Rivera owns a business and is reviewing her company's current financial statements.As a user of accounting information,Rivera is most interested in using this information to _____.
A)evaluate credit risk
B)approve new issues of stocks and bonds
C)plan and control activities
D)evaluate tax liabilities

Accepted Answer

Planning and controlling activities within the business is a crucial aspect of running a successful enterprise. Financial statements are a valuable tool for business owners to assess their company's financial health and make informed decisions. Riveria would likely use this information to make strategic plans, set budgets, monitor expenses, and control cash flows, among other things. While evaluating credit risk, tax liabilities, and approving new issues of stocks and bonds are also important for businesses, they are not as relevant to a business owner's daily operations and decision-making as planning and controlling activities.

Question 14

All organizations perform three basic business activities.List and describe these activities.

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Question 15

Identify and briefly describe the four categories of financial ratios.

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Question 16

What is accrual accounting? How does depreciation affect net income and cash flow?

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Question 17

_____ activities focus on selling goods and services.
A)Marketing
B)Operating
C)Financing
D)Investing

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Question 18

Reese works as a tax accountant at a mid-sized manufacturing company.Reese would be considered a _____.
A)management consultant
B)public accountant
C)management accountant
D)government accountant

Accepted Answer

Reese's job as a tax accountant at a manufacturing company falls under the category of management accounting, which involves working within an organization to provide financial information for management decision-making. Management consultants work as external advisors to help organizations improve their overall performance, while public accountants work for an accounting firm and serve a variety of clients. Government accountants work for government agencies and are responsible for managing public finances.

Question 19

Define GAAP and explain its purpose.

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Question 20

Explain the accounting equation.

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Quiz 15: Understanding Accounting and Financial Statements

Explain how exchange rates influence international accounting practices.Why was the International Accounting Standards Committee established?

Brown manages the sales force for his company.He is engaged in the _____ activity.

Discuss how forensic accounting helps fight crime in today's business world and illustrate using examples.

Describe the purpose of budgets in a business.

_____ activities focus on providing valuable assets to a business.

Mitchell works for a travel agency.Her job involves preparing financial reports and interpreting those reports to provide information for decision making.Which title is appropriate for Mitchell's job?

_____ activities provide the necessary funds to start a business and to expand it after it begins operations.

The natural progression of a business begins with _____.

Professionals who are responsible for gathering,recording,reporting,and interpreting the financial information of an organization are known as _____.

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower.As a user of accounting information,Walker is most interested in using this information _____.