US CMA Part 2 Using Financial Information and Accounting — practice questions
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Practice US CMA Part 2 Using Financial Information and Accounting in the app →Accounting is the process of collecting, recording, classifying, summarizing, reporting and analyzing which kiWhich branch of accounting prepares the external reports used by lenders, suppliers, investors and government Which private organization establishes the financial accounting standards used in the United States?The FASB and the IASB set out to develop a common set of global accounting standards. What has come of that efA yearly document that describes a firm's financial status and discusses its prospects for the future is calleIndependent accountants who serve organizations and individuals on a fee basis are known as what?Which responsibility of public accountants consists of reviewing the records used to prepare financial statemeWhich former member of the largest group of public accounting firms disbanded in 2002 as a result of the EnronWho alone may issue the auditor's opinion on a firm's financial statements?Managerial accountants can earn which professional certification by passing an examination?The Public Company Accounting Oversight Board has five members. How many of them must hold the CPA designationUnder the auditing standards required by the Sarbanes-Oxley Act, how long must audit work papers and documentaWithin what period must management and major stockholders disclose transactions such as sales of company stockHow does the work of accountants differ from the work of bookkeepers?Which three elements did Brother Luca Pacioli define as the main accounting elements?What is the other name for the total amount of investment in a firm minus any liabilities?Why must every transaction be recorded as two entries?You start a business by putting in $10,000 of your own cash, then borrow a further $10,000 from a bank. What dIn the accounting cycle, what happens immediately after transactions are recorded in a journal?Ledger totals for each account are summarized in a trial balance. What does the trial balance confirm?The balance sheet describes the financial condition of a firm over what span?In what order are assets listed on a balance sheet?Which test decides whether an asset counts as a current asset?Temporary investments of excess cash that can readily be converted back to cash appear under which balance sheAmounts owed to a firm by customers who bought goods or services on credit are recorded as what?How is the declining value of a fixed asset other than land accounted for?A bakery bought equipment for $56,000 and has taken a total of $16,000 in depreciation on it. What amount doesWhen does goodwill arise as an intangible asset?A bakery reports total liabilities of $70,150 and total owners' equity of $78,750. What must its total assets Which current liability is the counterpart of accounts receivable?Which current liability covers wages and taxes that have built up but for which no bill has arrived?Retained earnings equal total profits minus what?Long-term liabilities are claims that come due when?A bakery has a six-month, $15,000 loan from its bank. How is that loan classified on its balance sheet?A bakery must repay $5,000 of its equipment loan during the coming year, with the rest falling due later. WherOver what span does the income statement report a firm's results?Besides the dollar amount of sales, what else counts as revenues?What does gross sales measure?What earns a customer a sales discount?Returns and allowances record what?A bakery had gross sales of $275,000, sales discounts of $2,500 and returns and allowances of $2,000. What areFor a manufacturer, which costs belong in cost of goods sold?Beginning inventory was $18,000, cost of goods manufactured for the year was $109,500 and ending inventory wasWhy does a service firm's gross profit equal its net sales?Net sales are $270,500 and cost of goods sold is $112,500. What is gross profit?What are the two main types of operating expenses?Gross profit is $158,000 and total operating expenses are $115,100. What is net profit before taxes?Net profit before taxes is $42,900 and income taxes for the year are $10,725. What is net profit?Why does net profit fail to show how much cash a firm has?What does the statement of cash flows summarize?Into which three groups are a firm's cash flows divided?Which cash flows are grouped under investment activities?Which firms must include a statement of cash flows in their financial reports to shareholders?Operating activities provided $24,215 of cash, investment activities used $5,000 and financing activities usedAbout what share of accountants in the United States are self-employed?Of the accountants who belong to the AICPA, what share work in public accounting firms?How do cloud-based accounting firms compare with traditional firms in winning clients?About what share of small and medium-sized companies use cloud-based accounting software?What does a financial ratio state?Over what stretch of time are a firm's ratios typically compared?What is the honest limit of what ratio analysis can tell a manager?Ratios are classified by what they measure. Which set names those four classes?What do liquidity ratios measure?What are the three main measures of liquidity?How is the current ratio calculated?Traditionally, what current ratio has been considered good?A bakery has total current assets of $83,200 and total current liabilities of $60,150. What is its current ratHow does the acid-test ratio differ from the current ratio?A bakery has total current assets of $83,200, of which $15,000 is inventory, and total current liabilities of Why does a bakery show acid-test and current ratios that sit close together, while a manufacturer usually doesA bakery has total current assets of $83,200 and total current liabilities of $60,150. What is its net workingWhich three ratios are the main profitability ratios?What does the net profit margin measure, and which direction is better?A bakery earned a net profit of $32,175 on net sales of $270,500. What is its net profit margin?Return on equity measures what?A bakery earned a net profit of $32,175 and reports total owners' equity of $78,750. What is its return on equEarnings per share tells an investor what?A bakery earned a net profit of $32,175 and has 10,000 shares of common stock outstanding. What are its earninWhat do activity ratios reflect?How is the inventory turnover ratio calculated?Cost of goods sold was $112,500, beginning inventory was $18,000 and ending inventory was $15,000. What is theWhy can no single inventory turnover value be called good for every firm?How is the debt-to-equity ratio calculated, and which direction is generally better?A bakery reports total liabilities of $70,150 and owners' equity of $78,750. What is its debt-to-equity ratio?What does a debt-to-equity ratio above 100 percent tell you about who is funding the firm?