Business Chapter 8
Which of the following is a difference between financial accounting and managerial accounting?
Financial accounting provides company accounting information for public consumption, whereas managerial accounting provides stockholders with information about the overall financial performance of a firm. WRONG
Which of the following statements is true of activity-based costing?
It assigns costs based on the "one size fits all" rule. WRONG
Which of the following is a disadvantage of participatory budgeting?
It can lead to budgetary slack.
Which of the following statements is true of the Financial Accounting Standards Board (FASB)?
Its members can be reappointed to serve one additional term.
Which of the following refers to the claims that stockholders have against their firm's assets?
Liabilities WRONG
Which of the following is an advantage of using bottom-up budgeting?
Middle managers are likely to be highly motivated to achieve budgetary goals.
Which of the following best defines cost?
The value of what is given up in exchange for something else
Horizontal analysis is the comparison of:
account values reported on financial statements over two or more years.
Matt is asked by Clint Publishers to carry out an external audit of its books. He is also asked to prepare the tax returns for another client, Mrs. Zhirkov. Matt is a _____.
management accountant WRONG
In order to preserve independence and impartiality, Financial Accounting Standards Board (FASB) members are required to:
sever all ties with any firms or institutions they served prior to joining the board.
Assets refer exclusively to:
the cash payable by a firm. WRONG
Which of the following is a key external user of a company's accounting information?
Managers WRONG
A(n) _____ opinion is issued if an external auditor does not find any problems with the way a firm prepares and presents its financial statements.
unqualified
_____ is a branch of accounting that addresses the needs of external stakeholders, including stockholders, creditors, and government regulators.
Financial accounting
Established by the Sarbanes-Oxley Act of 2002, it is the responsibility of the _____ to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.
Public Company Accounting Oversight Board
Which of the following bodies makes U.S. accounting practices more consistent with those in other nations along with the Financial Accounting Standards Board (FASB)?
The International Accounting Standards Board (IASB)
The _____ reports the financial position of a firm by identifying and reporting the value of the firm's assets, liabilities, and owners' equity.
balance sheet
Kyra Inc. has applied for a business loan in the United Bank. In order to best assess the loan case, the loan officer at the bank, Sirigu, decides to look at the company's net income figure. Sirigu will find this information in Kyra's _____.
budgeted income statement WRONG
_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period.
budgeting
A flexible budget:
differentiates the budgeted costs for each sales level.
Benjamin works for a private firm that has been contracted to examine the books of accounts of the Luigi Corporation. After checking the figures and examining the company's accounting methods, he is required to prepare a report on his findings. The work that Benjamin is tasked with is the characteristic of a(n) _____.
external auditor
The capital expenditure budget:
identifies a firm's planned investments in major fixed assets and long-term projects.
Betty's job entails detecting problems such as embezzlement, waste, mismanagement, and employee theft at her organization. In this case, Betty is a(n) _____.
internal auditor WRONG
The heavy reliance on accounting information by business stakeholders has led to it sometimes being called the:
language of business
Sebastian is an employee of Power Trans Inc. His duties include preparing reports and analyzing company accounting data. He also appraises financial performances, verifies the accuracy and validity of the company's internal records and accounting procedures. Sebastian's role is that of a _____.
management accountant
Annual reports include _____ that disclose additional information about a firm's operations and special circumstances that clarify and supplement the numbers reported on the financial statements.
notes
In activity-based costing, product costs are assigned based on links between activities that drive costs and the _____.
production of specific goods
Managerial accounting:
provides reports and analysis to managers to help them make informed business decisions.
Through the generally accepted accounting principles (GAAP), the Financial Accounting Standards Board (FASB) aims to ensure that financial statements are _____.
relevant, reliable, consistent, and comparable
The balance sheet of Ranger Inc. shows its liabilities and owners' equity as $150,000 and $75,000, respectively. In this case, Ranger's _____.
total assets are $225,000