Accounting for Managers

Which of the following calculations are made on the income statement

1. Income from operations minus interest expense equals income before taxes 2. Income before income taxes-income taxes=net income 3. Gross profit-selling, general and admin expense=income from operations 4. Net sales-cost of Goods sold=gross profit

Luca Pacioli

1. The author of the method of Venice 2. A mathematics professor 3. Lived in the late 15th century 4. A Franciscan monk

Which of the following statements is true Regarding what each financial statement reports

1. The balance sheet reports the entities financial position at the end of the period 2. The income statement reports the entities earnings for the period 3. The statement of cash flow's reports the entities cash flows during the period

Section 404 of SOX requires

A report of the management and effectiveness of the companies internal control over financial reporting

Earnings information is presented under the___basis

Accrual

Earnings information is presented under the_____ basis rather than the ______ basis because it allows past performance to be measured more accurately

Accrual, cash

The two main components of Paid in capital and common stock and

Additional paid in capital

Bookkeeping procedures

Are used to accumulate the financial results of an entity activities

Stockholders equity is the ownership right of the stockholder in the ____ that remain after subtracting the _____of the corporations

Assets, liabilities

The balance she is a listing of the organizations

Assets, liabilities, and stockholders equity

The Sarbanes-Oxley Act of 2002 now prohibits

Auditing firms from performing a variety of non-auditing services for financial statement audit clients

Primary users of a firms accounting information include all the following except

Competitors

The subset of managerial accounting related to the determination and accumulation of product process or service cost is known as

Cost

The committee of accounting procedures of the AICPA (1939-1959) in the accounting principles board(1959-1973) both issued important accounting standards but failed to

Develop a conceptual underpinning for accounting and financial reporting

A primary objective of financial reporting is to provide timely information about of firms___and cash flows

Earnings

The results of operations for an entity are reported for a ___of time

Period

The objective a financial reporting for non-business organizations focus on providing information for resource_____ rather than investors

Providers

Primary users of a firms accounting information include

Regulatory agencies, management, employees, investors

A report on the management and effectiveness of the companies internal control over financial reporting is required for all SEC regulated companies under

Section 404 of the Sarbanes-Oxley Act of 2002

Audits are required for companies

Who securities (stocks or bonds) or publicly traded by investors

Accounting information is required by non-for profit entities such as

hospitals, religious organizations, political parties, trade associations, performing arts organizations

The IASB and ____ have been working together since 2002 to achieve convergence of___ and US GAAP

FASB, IFRS

True or false the public company accounting oversight board was created by the Dodd Frank wall street reform and consumer protection act of 2010

False

The ____ ____ Concept requires that the financial statements and notes include all necessary information to prevent a reasonably user of the financial statements from being misled

Full disclosure

the ____and FASB have been working together since 2002 to achieve convergence of IFRS and US

IASB, GAAP

In 2001 the____ which operates under____ foundation was formed in a restructuring during effort and has since assumed the responsibilities of the____which was disbanded at the time

IASB,IFRS,IASC

An _____ is an accounting standard issued by the ________

IFRS, IASB

Stockholders' Equity is

Increase by additional investments by stockholders during the year

Merchandise Inventory

Is a current asset account

Net worth

Is a misleading term because assets and liabilities are not generally worth amounts reported on the balance sheet

Which of the following is true regarding the balance sheet components

Liabilities are the obligation of the organization

Which of the following items is not considered a key element of ethical behavior for a professional accountant

Maintaining profitability to the greatest extent possible ensure that the clients accounting record shows a profit

Accounting information is required by governmental units at which of the following levels

Municipal state and federal

Establishment of____ and identification of fundamental_____ Will not directly solve accounting and reporting problems

Objectives, concepts

In recent years the FASB and IASB have backed away almost completely from the goal of a single global accounting language because of

1. A lack of interest in accounting convergence of the part of US investors and corporations 2. The huge switching cars that domestic companies and auditors would have to pay to change from US GAAP to IFRS

Which of the following are among the big four CPA firms

1. Pricewaterhousecoopers 2. Deloitte Touche Tohmatsu 3. Ernst and Young Global. 4. KPMG International

The five member public company accounting oversight board has the authority to settle and enforce

1. Quality control standards for public companies 2. Ethics and independent standards for public companies 3. Attestation standards for public companies 4. Auditing standards for public companies

The FASB and IASB have achieved convergence of the US GAAP and IFRS accounting standards with the respect to

1. Reporting for business combinations and non-controlling interests 2. Fair value measurements and borrowing costs Revenue recognition and stock compensation

The FASB and IASB have achieve convergence of the US gap and IFRS accounting standards with respect to

1. Reporting for business combinations in non-controlling interests 2. Revenue recognition and stock compensation 3. Fair value measurements and borrowing costs

The FASB accounting standards codification

1. Represents a single source of US GAAP 2. Is updated with changes communicated through an accounting standards update 3. Superseded the FASB's SFAS series and other divergent sources of US GAAP 4. Became affective in July 2009 5. Made it easier to access and research authoritative accounting standards

A qualified audit opinion may be issued in cases where

1. The independent auditor determines that one or more item as shown in the financial statements are not presented fairly 2. An explanatory paragraph is added regarding the firms inability to continue as a going concern 3. The independent auditor is unable to perform certain auditing procedures 4. The independent auditor determines that one or more items presented in the financial statements represents a significant departure from GAAP

__________ __________ refers To the entity for which the financial statements are being prepared

Accounting entity

Financial accounting information is

Based primarily on past transactions and events

The ______ to the user of accounting information should exceed the_____of providing it

Benefit, cost

The objectives of financial reporting for government sponsored entities engage in activities that are not unique to government should be similar to those of_______ enterprises

Business

Assets include

Cash Merchandise inventory Equipment AR

Most assets are not recorded at the current market value because of limitations imposed by the___principle

Cost

The ____ principle refers to the fact that transactions are recorded at their____Cost of the entity as measured in dollars

Cost, original

Retained earnings represent the. _____Net income of the entity that has been retained for use in business

Cumulative

Many of the objectives Financial financial reporting relate to the presentation of

Earnings and cash flow information

Accrual accounting records transactions when the

Economic activity has occurred

Financial statements are primarily oriented towards them

External user in our base on transactions in events that have happened in the past

Financial statements are primarily oriented towards the___ user and are primarily concerned with ___ information

External, past

The authoritative accounting standard setting body for state and local governmental units in the United States since 1984 has been

Governmental accounting standards board

Managerial accounting and cost accounting as compared to financial accounting

Have primarily in internal orientation and Data more likely to be used in future oriented way

Revenues and expenses gains and losses are reported on the

Income statement

The type of accounting work that is concerned with the use of economic and financial information to plan control and support the management decision making process is known as____accounting

Managerial

The ____Concept does not mean that revenue in expense

Matching

When is subsidiary is not wholly owned the other stockholders of the subsidiary referred to as _____ stockholders and their ownership rights are referred to as _______interest

Minority, noncontrolling

Accounting information is usually required for

Nearly every kind of organization

Each of the following statements about net sales is true except

Net sales includes only credit sales not cash sales

The two main components reported on the statement of changes in stockholders equity are

Paid in capital and retained earnings

Financial accounting generally refers to

Process that results in the preparation and reporting a financial statements for an entity

And audit is required by______ laws if the stocks or bonds of a company are owned and____ traded by investors

Securities, publicly

The FASB's two predecessor accounting standards setting bodies in the United States where

The committee of accounting procedures (1939-1959)and accounting principles board(1959-1973)

FASB Accounting Standards Codification

1. Made it easier to access and research authoritative accounting standards 2. Suspended the FASB's SFAS series and other divergent sources of US GAAP 3. Became affective in July 2009

Which of the following items is considered a key element of ethical behavior for a professional accountant

1. Maintaining independence both in appearance and in fact 2. Excepting an obligation to serve in the best interest of the employer The client and the public 3. Maintaining objectivity being impartial and free from conflict of interest 4. Having competence by acquiring maintaining the professional knowledge and skill to adequately perform the work assigned 5. Maintaining integrity being honest and forthright in one's dealings in communication with others

Which of the following items are normally included as key components of a corporation to annual report

1. Managements discussion and analysis of the financial statements 2. The reporting firms financial statements for the year 3. Highlights for the year include net revenues diluted earnings per share in return of stockholders equity

Accounting graduates are frequently employed in which of the following areas of practice

1. Not for profit accounting 2. Industrial accounting

Which of the following items are normally included as key components of a corporations annual report

1. The report of the external auditors examination of the financial statements 2. A five year or longer summary of key financial data 3. The notes to the financial statement

So three concepts/principles that relate to the entire

Accounting equation, accounting entity, and going concern

Financial reporting is primarily aimed at meeting the needs of

External users of accounting information who do not otherwise have access to the firms record

The financial accounting standards board reports directly to the

Financial Accounting Foundation (FAF)

The financial accounting standards Board reports directly to the (FASB)

Financial accounting foundation FAF

The internal revenue code and regulated regulations

Specify the rules followed in determining in entities income tax liability

The balance she is sometimes called the

Statement of financial position

Which of the following statements is true regarding the FASb standard-setting process

The FASB follows an open due process procedure

Which of the following statements is true regarding the statement of cash flow's

1. Cash received from the sale of buildings or equipment is in investing source(increase) of cash 2. Cash received from the sale of long-term debt is a financing source increase of cash 3. The increase in accounts payable for the year is shown as an operating source increase of cash 4. Depreciation expense is added back to net income in the operating activity section of the statement of cash flow's

Gross profit:

1. Is sometimes referred to as gross margin 2. Represents a sellers maximum cushion available to cover all other operating expenses before it is possible to have net income

An unqualified or "clean" independent auditor's opinion

1. States that the named financial statements presented fairly in all material respects the entity's cash flows for the period. 2. Explain that the audit was conducted in accordance with the standards of the PCAOB (US) 3. States that is the independent auditor's responsibility to express an opinion about the financial statements 4. Describes briefly the work that is involved in performing an audit

Which of the following statements are true regarding the FASB's standard setting process

1. The FAS peas deliberations in determinations often consider input from the SEC, ARIC PA, AAA, IMA, and FEI, among other professional organizations 2. The FASB follows an open due process procedure 3. The FASB invites input from any individual or organization who cares to participate in the process

Which of the following statements are true regarding the governmental accounting standards board

1. The GASB was established to develop accounting and reporting standards for state and local governmental units 2. The GASB reports directly to the FAF which is also the parent organization of the FASB The GASB is attempting to unify the accounting practices of many states and municipal entities in the US

Most states allow CPA candidates to sit for the CPA examination with a minimum of____ semester hours of college study but all states have enacted active legislation that now require a minimum of____Semester hours to become licensed as a CPA

120,150

The period of time selected for reporting the financial statement is known as the

Accounting period

Accounting for the effect of a transaction where the activity takes place rather than when the cash receipt or payment takes place is known as a_____ accounting

Accrual

And unqualified or clean independent auditors opinion

States that the auditors work requires the application of generally excepted auditing standards (GAAS)

So authoritative accounting standards setting body for companies whose securities are publicly traded in the United States since 1973 has been there

Financial accounting standards board (FASB)

The controller is usually responsible for both ___and accounting functions of the organization

Financial and managerial

The cost accounting standards board (CASB)

1. Establishes cost accounting standards applicable to government contract in excess of $700,000 2. Establishes cost accounting standards applicable to colleges and university that receive major federal research grants

Financial accounting information as presented in the financial statements may help users to assess

1. The firms future earnings potential based on an analysis past results 2. The relative strength and weaknesses of the firms financial position 3. The firms working capital in cash management practices

Current generally excepted accounting principles and auditing standards require that the financial statements of an entity show the following for the reporting period

1. Investment spot and distributions to owners during the period 2. Financial position at the end of the period 3. Earnings for the period 4. Cash flows during the period

An internal auditor

1. May be responsible for analyzing the operating efficiency of one of the companies divisions 2. May be responsible for reviewing the company's financial statements of a single plant 3. Often performs functions much like those performed by independent (external auditors)

The statutory authority to establish accounting principles for companies whose securities are publicly traded in the United States arrest with the

SEC

Which of the following account types is reported on the income statement

Gaines revenues and expenses losses

Which of the following about retained earnings is incorrect

Retained earnings is increase each year by the entities net income and dividends

The statuary authority to establish accounting principles for companies whose securities are publicly traded in the United States rest with the

SEC

income from operations

1. Is frequently called earnings from operations 2. Is the subtotal on the income statement that is not affected by the firms tax rate or by amount of interest expense incurred 3. Is frequently called operating income

Financial reporting is designated to meet the needs of users by providing information that is

Relevant to making rational investment in credit decisions and other informed judgments

A qualified or opinion may be issued in cases where

1. In explanatory paragraph is added regarding the firms inability ability to continue as a going concern 2. The independent auditor determines that one or more items as shown in the financial statements are not presented fairly

retained earnings

1. Is the cumulative net income of the entity that has been retain for use in the business 2. Is increase each year by the entities net income 3. Is referred to as an accumulative deficit if cumulative losses in dividends exceed cumulative net income 4. Is reduced by any dividends paid to stockholders