Reference no: EM132469416

Question 1: The _____ measures the profitability of total assets without considering how the assets are financed

1. price-earnings ratio
2. ratio of net sales to assets
3. return on assets
4. dividend yield

Question 2: COSO's Internal Control-Integrated Framework

1. was developed by AICPA
2. does not identify ethical values in principles related to control environment
3. has become the standard by which companies design, analyze, and evaluate internal control
4. has been replaced by the Sarbanes-Oxley Act

Question 3: The Management Discussion and Analysis

1. is a report assessing the probability that the company will remain in business
2. discusses the company's exposure to significant risks
3. is a report assessing the market value of the company's stock
4. provides an opinion on the competency of the company's board of directors

Question 4: Production budgets are used to prepare _____ budgets

1. selling and administrative expense
2. direct materials purchases, direct labor cost, and factory overhead cost
3. sales
4. capital expenditure

Question 5: In the context of cash, "EFT"

1. means "Efficient Funds Transfer"
2. can process certain cash transactions at less cost than by using the mail
3. makes it easier to document purchase and sale transactions
4. means "Effective Funds Transfer"

Question 6: The process by which management allocates available investment funds among competing investment proposals is called

1. investment capital
2. dividend rationing
3. cost-volume-profit analysis
4. capital rationing

Question 7: When Anderson, Inc. paid rent expense of 4,000 for the month of October, the effects on its accounts include

1. a 4,000 increase in cash and a 4,000 increase in retained earnings
2. a 4,000 increase in cash and a 4,000 decrease in retained earnings
3. a 4,000 decrease in cash and a 4,000 decrease in retained earnings
4. a 4,000 decrease in cash and a 4,000 increase in retained earnings

Question 8: In May, a corporation reports net income of 50,000 and paid 10,000 in dividends. If there was no beginning balance in stockholders' equity, the ending balance in stockholders' equity will be

1. 40000
2. 50000
3. 10000
4. 60000

Question 9: In accrual accounting, the effects of business transactions are

1. ignored in preparing financial statements
2. reflected on no more than one individual financial statement
3. recorded when the economic effect occurs
4. recorded only when cash flows occur

Question 10: ____ is NOT an element of the financial accounting system

1. a set of rules for determining the recording of economic events
2. a framework for preparing financial statements
3. a set of rules for the stock exchange
4. controls to determine whether errors occur during recording

Question 11: The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to

1. report on the financial activities of the company
2. report on any fraud and theft detected in the company
3. report on the state of the economy
4. report on the effectiveness of the company's internal controls