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Review Questions

Review Questions

1 .
Accounting is sometimes called the “language of ________.”
  1. Wall Street
  2. business
  3. assets and liabilities
  4. financial statements
2 .
Financial accounting information ________.
  1. should be incomplete in order to confuse competitors
  2. should be prepared differently by each company
  3. provides investors with guarantees about the future
  4. summarizes business activities in the company that have already occurred
3 .
________ is an example of an external user of financial accounting information.
  1. A new employee to the company
  2. The CEO
  3. The marketing department of the company
  4. A potential investor
4 .
Which groups typically create initial managerial accounting reports?
  1. bankers
  2. investors
  3. competitors of the business
  4. internal company decision makers
5 .
Which function input is used to determine the monetary value of an investment at the end of a time period?
  1. PV
  2. FV
  3. NPER
  4. Type
6 .
________ is the decrease in value of an asset over time.
  1. Future value
  2. Time value of money
  3. Depreciation
  4. Present value
7 .
What is the underlying financial concept used to compare money balances for different periods?
  1. time value of money
  2. financial value of money
  3. debt sorting
  4. economic inflation theory
8 .
What is one advantage that Excel has over QuickBooks?
  1. Making financial statements is easier.
  2. Excel is better equipped to do analysis of the numbers.
  3. Excel makes it easy to track payroll.
  4. Excel can generate tax reports.
9 .
Which feature is available in accounting software programs such as QuickBooks?
  1. analysis showing major spending categories by averages
  2. forming graphs and charts of the information
  3. determining which expenses are outside of the normal range
  4. generating tax reports