Question : 21.Publicstockexchanges a. operated by managers of a company. b. markets that sell : 1241686

 

 

21.Publicstockexchanges

a. are operated by managers of a company.

b. are markets that sell annual reports.

c. provide a forum for buying and selling of equity interests in other companies.

d. are used to evaluate debt and equity investments.

 

 

 

22.A statement that “the financial statements were prepared in accordance with generally accepted accounting principles” is found in the

a. collateral.

b. stock market.

c. footnotes to the balance sheet.

d. auditor’s report.

 

 

 

23.A statement that financial statement information “is the responsibility of the company” issuing the statements is found in the

a. footnotes to the financial statements.

b. loan contract.

c. management letter.

d. board of directors’ report.

 

 

 

24.CPA is an abbreviation for

a. Certified Public Accountant.

b. Certified Production Accountant.

c. Consumer Protection Agency.

d. Certified Permissible Accounting.

 

 

 

25.An equity investor is

a. a person who provides money to a company with the expectation that it will be paid back with interest.

b. a creditor that has a regular trade relationship.

c. a person who provides money to a company as a gift with a stipulation that it will be used as agreed.

d. a person who provides money to a company, though the original money never has to be repaid, and who may be entitled to receive periodic cash payments.

 

 

 

26.An explanation about the assumptions, estimates, and choices of alternative accounting methods used in the financial statements is found in the

a. footnotes to the balance sheet.

b. auditor’s report.

c. statement of shareholders’ equity.

d. president’s letter to the shareholders.

 

 

 

27.A debt investor is

a. a person who provides money to a company with the expectation that it will be paid back with interest.

b. a person who provides money to a company and expects periodic cash payments in return, though the original money never has to be repaid.

c. a person who provides money to a company as a gift with a stipulation that it will be used as agreed.

d. often referred to as a stockholder.

 

 

 

28.The board of directors

a. provides money to a company with the expectation that it will be paid back with interest.

b.makes corporate decisions such as hiring and firing management and setting company policy.

c.is responsible for the future profits of a company.

d. is in charge of accounting and human resources on a daily basis.

 

 

 

29.As a potential creditor, you are interested in a company’s ability to pay loan interest and principal as they come due.  Which of the following would be of the greatest interest to you in your analysis?

a. statement of shareholders’ equity.

b. income statement.

c. statement of cash flows.

d. Statement of Financial Accounting Standards.

 

 

 

30.Which one of the following statements is true?

a.Financial accounting is the only accounting used in the United States.

b.Companies that have a profit objective use not-for-profit accounting.

c. Managerial accounting targets operating decisions.

d. Financial and tax accounting are virtually the same.