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Exam 17: Using Management and Accounting Information

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Question 31

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During the year Comer, Inc., had $200,000 in goods available for sale. At the end of the accounting period it had an ending inventory of $40,000. This reveals that it had sold all but ____ worth of the available goods.

A) $200,000
B) $160,000
C) $40,000
D) $20,000
E) $10,000

F) A) and B)
G) C) and D)

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Question 32

Multiple Choice

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The cost of goods sold divided by the average inventory equals the

A) gross profit on operations.
B) beginning inventory value.
C) merchandise inventory.
D) ending inventory value.
E) inventory turnover.

F) A) and B)
G) A) and C)

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Question 33

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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. If the owners were interested in obtaining the company's current ratio, Christine should do which of the following?

The return on sales ratio indicates how effectively a firm is transforming its sales into profits.

The number of times a firm sells and replaces its merchandise inventory in one year is known as its

Would you expect the information needs of top managers to differ from those of middle- and lower-level managers? Explain your answer.

The current ratio is calculated by dividing

An airplane that FedEx owns and uses to deliver packages is a(n) ____ of FedEx.

The standard form of the accounting equation is assets equal liabilities minus owners' equity.

According to the accountant for Michael's Floral Supply, the firm's assets are $124,000 and its liabilities are $31,000. Which of the following statements is true?

Operations managers need management information in all of the following areas except

In theory, if Linda has complete and accurate information about a business decision she has to make, there is

Television sets that Best Buy owns for selling to its customers are classified as

The total dollar amount of all goods and services sold during the accounting period is called net sales.

Ridgley, Cooper, and Ross (RCR) Katie is the CEO of Ridgley, Cooper, and Ross (RCR) , a regional accounting firm. RCR offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, RCR could be considered a violator of the Sarbanes-Oxley Act. Katie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained. -Refer to Ridgley, Cooper, and Ross. Which of the following represents a key component of the Sarbanes-Oxley Act relating to consulting services?

Kim's Copy Shop is in the process of organizing its assets in the appropriate order. The manager asks you for help in arranging the following assets: equipment, accounts receivable, cash, merchandise inventory, and notes receivable. You list ____ first and ____ last.

There is added protection for whistle-blowers who report violations of the Sarbanes-Oxley Act.

The process of spreading the cost of a fixed asset over the asset's useful life is called

Ridgley, Cooper, and Ross (RCR) Katie is the CEO of Ridgley, Cooper, and Ross (RCR) , a regional accounting firm. RCR offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, RCR could be considered a violator of the Sarbanes-Oxley Act. Katie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained. -Refer to Ridgley, Cooper, and Ross. One of RCR's clients is ABC Electronics. RCR develops ABC Electronics' statements and reports for ABC's stockholders, financial analysts, and bankers. These services can be classified as which of the following?

A database is a single collection of data stored in one space that can be used by people throughout the organization to make decisions.