MGMT 1120 - Ch 8 Test

In the context of owners' equity, which of the following is true of retained earnings?

They are accumulated earnings reinvested in a company rather than being paid to the owners.

Which of the following is true of current assets?

They are resources that a firm expects to use up within a year.

Which of the following is true of government accountants in the United States?

They help ensure that a nation's banks and other financial institutions comply with the rules and regulations controlling their behavior.

In the context of balance sheets, resources owned by a firm are known as _____.

assets

In the context of managerial accounting, _____ are costs that are incurred as the result of some specific cost object.

direct costs

_____ indicate the cash a firm spends, or other assets it uses up, to carry out the business activities necessary to generate its revenue.

expenses

A _____ is one that is not based on a single assumed level of sales and enables managers to make meaningful comparisons between actual costs and budgeted costs.

flexible budget

The first stage in activity-based costing is to:

identify specific activities that create indirect costs and determine the factors that drive the costs of these activities.

A severe cyclone causes substantial damage to a brick manufacturing company's production equipment. As a result, the company spends a sum of $25,000 to repair the equipment. Given this information, the sum of $25,000 that the company spends is its _____.

indirect cost

In the accounting equation, assets are equal to:

liabilities plus owners' equity.

In the context of the income statement of an organization, accountants use accrual-basis accounting when recognizing _____.

revenues

If an auditor doesn't find any problems with the way a firm's financial statements were prepared and presented, the report will offer a(n) _____ opinion.

unqualified

The current liabilities of a company are reflected in the:

wages owed to the workers for work that they have already completed.

_____ 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

In the context of accounting, which of the following best defines cost?

.The value of what is given up in exchange for something else

Which of the following statements is true of activity-based costing (ABC)?

It is more complex than the direct labor method

_____ is the profit or loss a firm earns in the time period covered by the financial statement that reports the revenues and expenses.

Net income

In which of the following ways do public accountants differ from management accountants?

Public accountants conduct external audits, whereas management accountants analyze the financial statements of their own organization.

Congress passed the _____ that banned business relationships that might create conflicts of interest between certified public accounting (CPA) firms and the companies they audit.

Sarbanes-Oxley Act of 2002

Which of the following is an example of an intangible asset?

The goodwill showed by a food manufacturing company by helping its competitor at a time of crisis