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Exam 15: Using Management Information Systems and Accounting Information

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Question 1

Multiple Choice

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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) Non-accounting services
B) Tax accounting
C) Financial accounting
D) Managerial accounting
E) Cost accounting

F) B) and C)
G) None of the above

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Question 2

Multiple Choice

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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 correct?

A) The owners' equity is $155,000.
B) The owners' equity is $93,000.
C) The firm's current assets are $62,000.
D) The firm's current liabilities are $24,000.
E) The firm's accounting equation won't balance.

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

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B

Question 3

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

A public corporation must change its lead auditing firm

Knowledge management is a firm's procedures for using computer software to solve business problems.

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

Because of the Sarbanes-Oxley Act, accountants must maintain financial documents and audit work for

Net income is the profit earned (or the loss suffered) by a firm during an accounting period after the cost of goods sold and all expenses have been deducted from revenues.

When Betty Tran prepared a personal income statement, the remainder or residual value is called

A firm's MIS data bank should include all past and current data that may be useful in managing the firm.

Which section of the statement of cash flows would show Wendy's payments for food ingredients and wages paid to employees?

If total liabilities were subtracted from total assets, the residual value would be

In order for The Gift Market, a local specialty store, to purchase Christmas merchandise for selling in its store, it had to borrow money from a local bank. This debt owed to the bank is a(n)

Debts that are to be repaid in two years are referred to as

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

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. What does GAAP stand for?

If you wanted to evaluate the financial condition of Target Stores, a leading discount chain, you would most likely compare its financial ratios to ____ ratios.

Individuals or organizations outside of a company will never have the need or desire to view information on another company's finances.

The ease with which an asset can be converted into cash is referred to as its

If you are taking a common sense approach to evaluating a firm's accounting information, which of the following would not be something that you would hope to see?