BUS 101: Chapter 8 Practice Quiz

_____ provide analysis and prepare reports and financial statements for their organization.

Management accountants

In the context of budget preparation, which of the following is an advantage of using bottom-up budgeting?

Middle managers are likely to be highly motivated to achieve budgetary goals

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 is true of current assets?

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

In the context of balance sheets, accounts receivable is an example of _____.

current assets

In the context of budget preparation, the master budget of a firm organizes the _____ into a unified whole.

financial budget and the operating budget

In the context of financial statements of a company, cash flow statements commonly begin with _____.

net income

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

The three kinds of basic financial statements that are prepared in financial accounting are:

balance sheet, income statement, and statement of cash flows

In the context of the calculation of the net income of a firm, the final step of the process comprises:

deducting the firm's interest expenses and taxes from its net operating income

In the context of financial accounting, if a firm wants to introduce any significant changes in how it prepares its financial statements, _____.

it must first clearly identify and describe these changes as per the generally accepted accounting principles (GAAP)

In the accounting equation, assets are equal to:

liabilities plus owners' equity