BA ch 13, 14, 15

On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from operating activities would include:

increases in the manufacturer's inventory

By dividing cost of goods sold by the average inventory to measure the speed with which inventory moves through the firm and is turned into sales, the _____ ratio is calculated.

inventory turnover

Which type of information system is used only by operational managers?

transaction processing system

The ratio of total current assets to current liabilities is called the _____ ratio.

current

A short-term loan from a bank, supplier, or others that must be repaid within a year is a(n):

note payable

Copying of software programs by people who haven't paid for them is called:

software piracy

About two-thirds of all U.S. commercial banks are chartered by the state in which they are based. The banks are called _____ banks.

state

What are the broad categories of commercial banks in the United States?

state and national

On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from investment activities section would include:

the sale of land adjacent to the manufacturer's administrative office building

Hal Silverstein has a savings account, also called a _____, at his local credit union.

time deposit

Thrift institutions:

were formed specifically to encourage household savings

The income statement is a snapshot of the firm's financial position at a certain point in time.

False

The primary use for an expert system is to answer "what if" questions.

False

The purchase or sale of U.S. government bonds by the Federal Reserve to stimulate or slow down the economy is called:

an open market operation

A(n) _____ is a yearly document that describes a firm's financial status and usually discusses a firm's financial activities during the past year and its prospects for the future.

annual report

Credit cards: -are sometimes referred to as plastic money -do not replace money -are used as a substitute for cash and checks -defer payment to a later point in time -are accurately described by all of the above

are accurately described by all of the above

Things of value owned by a firm are called its:

assets

Which of the following calculations is a formal expression of the accounting equation?

assets = liabilities + owners' equity

The Banking Act of 1933 gave the Federal Reserve System the authority to:

ban interest on demand deposits

The operating license for a commercial bank is called a(n):

bank charter

In its role as lender to member banks, the Federal Reserve is called the:

banker's bank

Finance companies make loans to people who could not get credit anywhere else. To compensate for taking this extra risk, finance companies:

charge higher interest rates than commercial banks do

Which of the following is an example of nondepository financial institutions?

commercial finance companies

Haley Optics manufactures lenses used in cameras, binoculars, and scientific equipment. It had sales of $300,000 during the last quarter. It depreciated assets during the year by $20,000. The Earnings before interest and taxes was calculated to be $120,000. On an income statement, an accountant would classify the remaining $160,000 as:

cost of goods sold

Which of the following is the BEST example of a current asset for a university bookstore?

credit card charges by book buyers

A _____ is a nonprofit, member-owned financial cooperative.

credit union

Which of the following financial institutions is a not-for-profit institution?

credit union

The idea behind _____ is the need that criminal investigators have for examining evidence on computer hard drives such as in e-mails or databases in order to build cases against embezzlers and others.

digital forensics

Computers can enhance accounting by: -preparing tax returns -handling general ledger functions -controlling purchase orders -providing a means to control inventory -doing all of these

doing all of these

Which of the following services would you expect a depository institution to offer?

electronic funds transfer

Thrift institutions were formed specifically to make home mortgage loans and to:

encourage household savings

Maysteel, which makes components for electric utilities, has created a(n) _____ that allows its six plant managers in Wisconsin and Ireland to access customized information about the costs and sales at the other plants. The only people who can access this information are its managers.

enterprise portal

Which of the following statements about international banking is true?

Foreign banks are subject to fewer regulations than U.S. banks.

Which of the following statements about credit unions is true?

None of the above statements about credit unions is true.

Which of the following statements about knowledge management is true?

None of the above statements about knowledge management is true.

A current asset is one that can or will be converted into cash within one year.

True

A local area network (LAN) connects computers at one site and enables their users to exchange data and share hardware and software from a variety of computer manufacturers.

True

All publicly held companies must include a statement of cash flows in their financial reports to stockholders.

True

An accounting journal is a chronological list of transactions, each assigned to a particular account.

True

At the first level of a management support system is an information-reporting system.

True

Consumer finance companies make loans to individuals; commercial finance companies make loans to businesses.

True

Margin requirements tell the minimum amount of cash an investor must put up when borrowing from a bank or brokerage firm to purchase stock.

True

National banks must belong to the Federal Reserve System and must carry FDIC insurance.

True

Networking links make it easier for someone outside an organization to gain access to a computer's information.

True

Retained earnings are the amounts left over from profitable operations since the firm's beginning. They are equal to total profits minus all dividends paid to stockholders.

True

Savings banks:

are a type of thrift institution

How does an executive information system (EIS) differ from a decision support system (DSS)?

EIS is customized for an individual executive, and DSS is not.

The ratio of net profit to the number of shares of common stock outstanding is called the:

Earnings per share

A brokerage firm is an example of a depository financial institution.

False

Revenues are the dollar amount of sales plus any other income received from sources like interest, dividends, and rent.

True

The Internet is essentially a worldwide wide area network (WAN).

True

The nation's insurance companies are major suppliers of funds to the U.S. financial system.

True

Ennis Worth has a six-month loan for $7,500 that he used to refurbish the fishing boat he uses to earn his living. This loan is an example of:

a long-term liability

Collecting data over a period of time and then processing that data all at the same time is called _____ processing.

batch

Cerner Corporation has created a(n) _____ containing the medical records of more than 400,000 people who received treatment at more than 200 different emergency rooms. It can be used to help emergency room physicians make decisions about what kind of treatment to give their patients.

database

Customer records containing names, addresses, phone numbers, and purchase histories would be most likely stored in:

database management systems

A checking account is also commonly referred to as a:

demand deposit

Toys "R" Us was founded in 1948. The iconic mascot Geoffrey the Giraffe was introduced in February 1960. Geoffrey used in all ads and promotions used by the retail toy chain is an example of a(n) _____ because it does not have a physical existence.

intangible asset

A bank charter:

is an operating license for a commercial bank

A network that connects computers at one site is called a(n):

local area network

The balance sheet summarizes a firm's financial position over a period of time, for instance 3 months or a year.

False

Assume the net profit for manufacturer of mountain bikes was $1,000,000 last year. The firm paid out $40,000 in dividends and has 200,000 shares of common stock outstanding. Its earnings per share (EPS) was:

$5

The usual expression of the accounting equation is Assets = Liabilities + Owners' Equity.

True

Virtual private networks can be used to connect two or more LANS.

True

U.S. banks provide better customer service and have access to more sources of funding than local banks in many countries.

True

At the first level of a management support system is a(n) _____ system, which uses summary data collected by the transaction processing system to provide managers with decision-making information.

information reporting

A company that specializes in planning parties for children had $7,000 worth of inventory on January 1, 2018, and it had $5,000 worth of inventory on December 31, 2018. If its cost of goods sold for that period was $3,000, and its net profit was $9,000, what was its inventory to turnover ratio?

2 times

Which of the following statements about computer networks is true?

A computer network is a group of two or more computers linked together by communications channels to share data and information.

_____ are bills that have accumulated and must be paid at a specified future date within the year although no bill has been received by the firm.

Accrued expenses

_____ is the system used to record a firm's financial transactions in a routine and clerical process.

Bookkeeping

_____ are profit-oriented depository financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services.

Commercial banks

Earnings per share (EPS) is the dollar amount earned by each share, not the actual amount given to stockholders in the form of dividends.

True

Like local area networks (LANs), intranets are private corporate networks.

True

Dwain Hutcheson is a recent college graduate who found himself in debt as a result of credit card expenditures and in need of dependable transportation. Hutcheson recently purchased a used motorcycle from Speed Cycles. In financing the cycle, Hutcheson found that he would be making payments to Beneficial Corp., a company that deals in poor credit risks and short-term loans. Hutcheson was dealing with a:

finance company

A bank is engaged in _____ when it accepts the farmer's deposit of $127,000, and then makes a business loan of $50,000 to a small business owner.

financial intermediation

The Federal Deposit Insurance Corporation (FDIC):

insures deposits in commercial banks

At Samaritan Medical Center (SMC) in Watertown, N.Y., care providers needed to continuously monitor patients' vital signs as staff moved them from the emergency department to radiology and other hospital areas. The hospital administrators decided to use a(n) _____, a cost-effective way to connect the monitoring devices and to prioritize the critical data that the devices were gathering. A nurse sitting at a terminal knows immediately if there is a problem.

local area network

A(n) _____ is the collective term that describes the methods and the equipment used to provide information about all aspects of a firm's operation.

management information system

For a college student who needs to buy an $80 textbook, the money she received from her parents for the purchase of school supplies would be used as a:

medium of exchange

The most frequently used and the most flexible tool that the Federal Reserve has that it can use to change the economic environment is:

open market operations

The Financial Accounting Standards Board (FASB) is currently:

pushing for major changes in GAAP

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team

Amounts owed to the firm by customers who bought goods and services on credit are called:

accounts receivable

Dakota Mining Company pays its bills and employees with checks drawn on a bank from another part of the country. Checks usually take about three days to clear the firm's account. _____ is the advantage gained during the check-clearing time.

float

Competing against foreign banks can be difficult for U.S. banks because:

foreign banks are subject to fewer regulations than U.S. banks

A company that needs access to high-end computing resources periodically but has little money to spend on such a project can use:

grid computing

Administrative accounting is the term given to the internal workings of the company, such as budgets, sales reports, and analyses of how well marketing strategies are working.

False

Another term for a checking account is a time deposit.

False

Recent legislation has decreased the roles of the chief audit executive (CAE).

False

The ratios that are of special interest to the firm's creditors and measure the firm's ability to pay short-term debts as they come due are called _____ ratios.

liquidity

_____ is cash held in the form of coins and paper money.

Currency

An accountant who has a bachelor's degree, passes a test prepared by the professional organization AICPA, and has a certain number of years of on-the-job training becomes a:

certified public accountant

NMCI is the name used for a large-scale effort to link Navy and Marine Corps computer systems on bases, boats, and in offices around the world. When completed, this internal WAN will use Internet technology to link soldiers in the field with support personnel on bases, etc. NMCI is an example of a(n):

intranet

By helping to eliminate critical errors and allowing nonprofits to stay focused on their primary missions of improving communities throughout California, nonprofit information specialists play a critical role and have a significant impact on work in the nonprofit sector. The nonprofit information specialist is frequently the first resource that board members, staff, and volunteers of nonprofit organizations, as well as the general public, contact to find answers to their questions. Trained NIS (nonprofit information services) staff must understand nonprofit culture and terminology and know the experts in a field to be able to give questioners appropriate information, community resources, Web sites, or consultant referrals. NIS staff use _____ to improve productivity and foster innovation.

knowledge management

Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?

retained earnings

Weeds, sand, and paper clips would not make good mediums of exchange because they lack the key characteristic of:

scarcity

The power the Federal Reserve has to control credit terms on some loans made by banks and other lending institutions is called ______ controls.

selective credit

Which of the following statements about the accounting profession is true?

Accountants are typically classified as private or public accountants.

A kennel designed for boarding small dogs has current assets of $8,000, current liabilities of $2,000, and fixed assets of $25,000. The small company has a current ratio of:

4

Which of the following statements about the accounting profession is true?

All of the above statement about the accounting profession are true.

_____ are debts that are to be paid within twelve months.

Current liabilities

Accounting is the process of collecting, recording, classifying, summarizing, reporting, and analyzing the financial condition of an organization.

True

An accounting system should generate both internal and external reports.

True

The postage stamps and petty cash in the architect's drawer as well as his drawing table, his office furniture, and money owed to him by clients are all examples of assets.

True

Insurance policyholders make premium payments to buy financial protection. Insurance companies invest the premiums in:

all of the above

The last step in the accounting cycle is to:

analyze financial statements and management reports

In a transaction processing system the database can be updated in two ways. They are _____ processing.

batch and on-line

The two types of finance companies are:

commercial finance companies and consumer finance companies

Virtual private networks (VPNs):

connect two or more private networks using a public network

In the process of financial intermediation, households, businesses, and governments can all be are categorized as:

demanders of funds

The Federal Deposit Insurance Corporation (FDIC): -is an independent, quasi-public corporation -is backed by the full faith and credit of the United States government -insures deposits in commercial banks and thrift institutions up to a ceiling of $250,000 per account -oversees the National Credit Union Share Insurance Fund -is accurately described by all of the above

is accurately described by all of the above

Larry's Kite Shack operates on the Florida beaches during the tourist season. Last year, Larry sold $25,000 worth of kites. His cost of goods was $7,000, and he paid himself a salary of $20,000. On an income statement, Larry's business would have a(n):

net loss

Gross sales for Nevada Silver, a retailer of silver jewelry was $120,000 for the month of May. Sales discounts amounted to $18,000. There were no returns. The difference, $102,000, is Nevada Silver's:

net sales

Current assets, such as marketable securities and inventory, usually are expected to be turned into cash within:

one year

One of the major financial burdens for many companies is the need to provide and maintain funds to provide benefits needed by former employees. One of the ways that Delta Airline tried to avoid bankruptcy was by reducing the payout from this fund because returns on investments were not keeping pace with the number of retirees and their benefit demands. This example reflects a problem with:

pension funds

Which of the following is NOT an example of a cost of goods sold for a manufacturer of electric fans?

sales commissions

Liquidity ratios measure:

short-term financial stability

A(n) _____ is the financial statement that is used to assess the sources and uses of cash flow during the year.

statement of cash flows

Which of the following statements about computer networks is true?

Computer networks include clients and servers.

Another term for net worth is working capital.

False

Sarbanes-Oxley allowed accountants to serve as both auditors and advisors for their clients

False

_____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm.

Financial accounting; Managerial accounting

Which of the following statements about knowledge management is true?

Knowledge management focuses on gathering and sharing an organization's collective knowledge to improve productivity and foster innovation.

Cerner Corporation has created a(n) ______ that helps emergency room physicians make decisions about what kind of treatment to give their patients. The system contains the medical records of more than 400,000 people who received treatment at more than 200 different emergency rooms. By comparing inputted information about a patient with information stored in the system, doctors can get a diagnosis and suggestions as to possible treatments.

decision support system

When bank examiners conclude that a bank has serious financial problems, the FDIC can:

do any of the above

Cupcakes, hamburgers, and cut flowers would not make good mediums of exchange because they lack the key characteristic of:

durability

A(n) _____ is a management support system that is customized for an individual executive. It provides specific information for strategic decision making.

executive information system

On an income statement, expenses, such as professional salaries, utilities, office supplies, rent, and insurance, are called _____ expenses.

general and administrative

On an income statement, operating expenses that cannot be linked to cost of goods sold or to sales are called _____ expenses.

general and administrative

Independent accountants who serve organizations and individuals on a fee basis are called public accountants.

True

In the accounting field, CMA stands for:

certified managerial accountant

It is paramount for a dentist to provide the best patient care possible. The dental assistant, even though he or she may perform unskilled work such as fitting a patient with a bib, must also know the proper use of surgical and sterilization techniques to ensure patient safety. Formally educated dental assistants have the knowledge to understand the difference between sterilization and disinfection, and the relative importance of both. Since such are nearly always performed by dental assistants, a dental assistant can be correctly identified as a:

knowledge workers