Please answer all questions.
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1 | |
After ratios are computed, it is helpful to compare them with those of similar organizations. |
| | A) | True |
| | B) | False |
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2 | |
Balance sheets show revenues, expenses, and profits at one point in time. |
| | A) | True |
| | B) | False |
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3 | |
A balance sheet shows the firm's profitability over time. |
| | A) | True |
| | B) | False |
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4 | |
Expenses are incurred monthly. |
| | A) | True |
| | B) | False |
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5 | |
The income statement brings the information on financial statements into sharper focus so that a firm's managers and others can measure its efficiency, profitability, and sources of |
| | A) | True |
| | B) | False |
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6 | |
Bookkeeping is the language business uses to record, measure, and interpret financial transactions. |
| | A) | True |
| | B) | False |
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7 | |
Only small businesses use the financial information compiled by accountants. |
| | A) | True |
| | B) | False |
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8 | |
Owners' equity represents loans to keep the business running. |
| | A) | True |
| | B) | False |
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9 | |
The accounting cycle collects, records, and analyzes raw data annually. |
| | A) | True |
| | B) | False |
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10 | |
Costs of goods sold is calculated by subtracting the ending inventory from the beginning inventory. |
| | A) | True |
| | B) | False |
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11 | |
Gross income is the profit (loss) after all expenses excluding taxes have been deducted from revenue. |
| | A) | True |
| | B) | False |
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12 | |
Nonbusiness organizations use accounting to demonstrate how well their funds are being used. |
| | A) | True |
| | B) | False |
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13 | |
All business transactions must be classified as assets or liabilities. |
| | A) | True |
| | B) | False |
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14 | |
Liquidity ratios show how fast a company can turn assets into cash to pay off short-term debt. |
| | A) | True |
| | B) | False |
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15 | |
Income statements are sometimes called profit and loss statements. |
| | A) | True |
| | B) | False |
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16 | |
Accounting is only one aspect of bookkeeping and involves the recording of routine, day-to-day business transactions. |
| | A) | True |
| | B) | False |
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17 | |
Balance sheets show assets, liabilities, and owner's equity. |
| | A) | True |
| | B) | False |
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18 | |
Asset utilization ratios measure how much debt a company is using relative to other sources of capital. |
| | A) | True |
| | B) | False |
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19 | |
Assets are a firm's cash resources. |
| | A) | True |
| | B) | False |
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20 | |
When the financial statements are completed, the firm's books are said to be "closed," and the accounting cycle begins anew for the next accounting period. |
| | A) | True |
| | B) | False |
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2002 McGraw-Hill Higher Education