Review Questions
1
.
Accounting is sometimes called the “language of ________.”
-
Wall Street
-
business
-
assets and liabilities
-
financial statements
2
.
Financial accounting information ________.
-
should be incomplete in order to confuse competitors
-
should be prepared differently by each company
-
provides investors with guarantees about the future
-
summarizes business activities in the company that have already occurred
3
.
________ is an example of an external user of financial accounting information.
-
A new employee to the company
-
The CEO
-
The marketing department of the company
-
A potential investor
4
.
Which groups typically create initial managerial accounting reports?
-
bankers
-
investors
-
competitors of the business
-
internal company decision makers
5
.
Which function input is used to determine the monetary value of an investment at the end of a time period?
-
PV
-
FV
-
NPER
-
Type
6
.
________ is the decrease in value of an asset over time.
-
Future value
-
Time value of money
-
Depreciation
-
Present value
7
.
What is the underlying financial concept used to compare money balances for different periods?
-
time value of money
-
financial value of money
-
debt sorting
-
economic inflation theory
8
.
What is one advantage that Excel has over QuickBooks?
-
Making financial statements is easier.
-
Excel is better equipped to do analysis of the numbers.
-
Excel makes it easy to track payroll.
-
Excel can generate tax reports.
9
.
Which feature is available in accounting software programs such as QuickBooks?
-
analysis showing major spending categories by averages
-
forming graphs and charts of the information
-
determining which expenses are outside of the normal range
-
generating tax reports