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Exam 17: Using Management and Accounting Information

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Question 101

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In 1987, the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) required all publicly traded companies to include a statement of cash flows along with the balance sheet and income statement in their annual report.

A) True
B) False

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Question 102

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Explain why a firm's financial statements should be audited.

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A firm's financial statements should be ...

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Question 103

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Typically, the majority of the data gathered for an MIS come from external sources.

Which of the following statements is true?

Which of the following is true about CPAs?

The value of goods on hand for sale to customers is called

The transformation of data into a form that is useful for a specific purpose is called data processing.

Christine's First Job Christine has just earned her undergraduate degree in accounting and has successfully completed the CPA exam. She recently interviewed with a relatively small and new company and was offered a job. The offer sounded very promising; the job had opportunities to grow with the company and provided diverse challenges. Christine accepted the job. Once Christine started working, she realized that the owners and employees did not have a general understanding of accounting. She had to teach them how data is transformed into financial information and, from that point, reported on various statements. When she talked about the statement of financial position, they had no idea what she was talking about. She was the qualified individual responsible for accounting. No one else working with her had much knowledge. They did not even know the different financial ratios that someone could use to understand the financial standing of a company. Christine knows it will be a challenge to keep everyone on the same page when it comes to numbers and reports. -Refer to Christine's First Job. When Christine talked about the accounting equation and the resources owned by the business--the cash, inventory, and equipment--she wants to make clear that she's referring to the ____ of the firm.

Commonly used in accounting analysis, a ____ shows a relationship between two elements of a firm's financial statements.

Wallace Plumbing Company had income from operations of $110,000. It paid federal income taxes of $26,000. What was the firm's net income after taxes?

Numerical or verbal descriptions that usually result from measurements of some sort are called data.

Current assets are assets that can be converted quickly into cash or that will be used in two years or less.

General Motors decides to close one of its manufacturing plants in the Midwest. GM sells the facility to a new foreign automobile manufacturer. The money GM receives from this sale would belong in the ____ section of the statement of cash flows.

The statement of financial position is also known as the balance sheet.

Describe each of the five functions of a management information system.

On a balance sheet, assets are listed in order, from the most liquid to the least liquid.

Human resources managers need management information in all of the following areas except

Which of the following is not one of the sections included in a typical business report?

As the accountant for Ideal Manufacturing Company, you determine the following totals in your balance sheet: total assets―$124,000; current liabilities―$41,000; long-term liabilities―$13,000. What is the total owners' equity for this company?

Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. After the first year of operation, the total owners' equity is listed as $60,000. Most likely, the additional $10,000 of owners' equity is