chapter 8
_____ 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
Since it deals strictly with numbers, the practice of accounting is free from ethical obligations.
False
_____ is a branch of accounting that addresses the needs of external stakeholders, including stockholders, creditors, and government regulators.
Financial accounting
Which of the following refers to the claims that stockholders have against their firm's assets?
Owners Equity
_________ would be listed in the owners' equity section of a balance sheet.
Retained earnings
The CFO of SpotLight Production Company requests his accountant Felipe to prepare a customized report of the cost overruns at the company's production facility in L.A. Felipe is a managerial accountant.
True
Which of the following is a key external user of a company's accounting information?
competitors
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) _____.
eternal auditor
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
In activity-based costing, product costs are assigned based on links between activities that drive costs and the _____.
production of specific goods
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 _____.
profit and loss statement
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 _____.
public accountant
Assets refer exclusively to:
resources owned by a firm
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
Which of the following is a difference between financial accounting and managerial accounting?
Financial accounting provides stockholders with information about the overall financial performance of a firm, whereas managerial accounting is designed to meet the needs of company managers.
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)
Which of the following best defines cost?
The value of what is given up in exchange for something else
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