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Study Resources (Accounting)

12.1   Questions 1) Financial analysis is used to predict the future of a business. 2) Financial statement analysis indicates only that a problem may exist and offers clues as to what the problem might be. 3) Financial analysis focuses on evaluating a company's past performance to predict its current performance. 4) Financial analysis.
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31) A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term investments and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The company's current ratio is: A) 0.933. B) 1.550. C) 1.133. D) 3.217. 32) The 2011 and 2012 balance sheets for Newport Industrial showed Cash of $8,000.
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11) Systems analysis involves formulating a blueprint for a completed system. 12) Auditors primarily use IPO and HIPO charts. 13) Section 404 of the Sarbanes-Oxley Act requires that annual filings of publicly traded companies include a statement of management's responsibility for establishing and maintaining adequate internal control as well as an assessment.
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11) Some organizations that use computers to process transactional data must have an information system function. 12) The operations function allows specialization in areas such as operating systems and software and communications technology. 13) Cloud computing describes the increasing trend for data processing capabilities to be provided as a service via the.
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11) Some investing and financing activities involve no cash flows, so they: A) represent no significant financial change. B) should be included in the three main sections of the statement of cash flows. C) should be reported in a separate section of the cash flow statement. D) must be converted to cash at the.
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12.2   Questions 1) The management discussion and analysis is typically located after the financial statements in a company's annual report. 2) A business model describes what a business does, what it sells, and who it sells to. 3) A business model deals with how a business makes customers want to buy their product. 4).
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111) A company with an accounts receivable turnover of four means that the company collects its receivables approximately every ________ days. A)  30 B)  60 C)  90 D) 120 112) If accounts receivable turnover is 10.4, this means that from the date of: A) purchase to the date of payment is approximately 35 days. B) sale to.
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65) The IT benefits for AISs are ________, ________, and ________. 66) Application ________ involves the process of ensuring the suite of organization's applications work together in order to meet organizational goals and objectives. 67) ________ software assists management in managing inventories and scheduling production. 68) In ________ ________ ________, computers take control.
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1) Tools used in the analysis, design, and documentation of system and subsystem relationships are known as system techniques. 2) The interim audit requires some type of substantive testing. 3) Substantive testing involves direct verification of financial statement figures. 4) When evaluating internal controls, auditors are usually not concerned with the flow of.
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11.4   Questions 1) The FASB recommends use of the direct method, rather than the indirect method, of preparing a cash flow statement. 2) Under the direct method, the only section that differs from the indirect method is the financing activities section. 3) In the direct method, each line of the income statement is.
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41) Gains and losses on plant, property, and equipment are reported: A) as a retrospective application. B) in the discontinued operations section. C) in the continuing operations section. D) in the extraordinary items section. 42) A(n) ________ is a distinguishable part of a business that is subject to a different set of risks and returns.
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81) Advanced Industries, Inc. the following for 2012: Earnings/share of $17.68 Market price per share of common stock: $52 Number of shares of common stock outstanding: 52,000 Net income: $48,000 Dividends/share: $7.14 What is the dividend yield for Advanced Industries, Inc. (to the nearest tenth of a percent)? A) 13.7% B) 40.4% C) 92.3% D) 34.0% 82) Advanced Industries, Inc. the following for 2012: Earnings/share of $17.68 Market.
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21) Operating expenses–other than depreciation–for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be: A) $335,000. B) $342,000. C) $328,000. D) $ 7,000. 22) Operating expenses–other than depreciation–for the year were $280,000. Prepaid expenses increased by.
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71) Allied Industrial has net sales of $1,200,000, net income of $85,000, average current assets of $53,000, average fixed assets of $184,000, and average total assets of $237,000. Allied Industrial's fixed asset turnover ratio is: A) 5.06. B) 0.15. C) 6.52. D) 22.64. 72) Allied Industrial has net sales of $1,200,000, net income of $85,000,.
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41) Morgan Company's Accounts Receivable decreased by $25,000 and its Accounts Payable increased by $12,000. What is the net effect on cash from operations under the indirect method? A) +$37,000 B) -$13,000 C) -$37,000 D) +$13,000 42) Haskins, Inc.'s Accounts Receivable decreased by $30,000 and its Accounts Payable decreased by $16,000. What is the net.
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42) Preparing flowcharts can be viewed as more ________ than ________. 43) ________ ________ are a fact-gathering technique where persons provide written answers to general, rather than specific, questions. 44) ________ ________ is based on the premise that quantitative measurement is essential to the design of efficient procedures. 45) The formula for capacity.
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11.5   Questions 1) Free cash flow is the anticipated amount of cash available from operations after paying for planned financing of stock and paying dividends. 2) The formula for free cash flow is anticipated cash from operations minuscash payments for investments in long-term assets. 3) The cash conversion cycle depends upon the time.
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12.3   Questions 1) The three ways to analyze financial statements are by using horizontal, vertical and ratio analysis. 2) The interest coverage ratio is an indicator of a company's ability to repay interest on its debt. 3) The formula for the debt ratio is total liabilities divided by Long-term assets. 4) Operating profit (EBIT).
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89) The term that best describes an information system that is tailored to the strategic information needs of top-level management is a(n) A) accounting information system. B) expert system. C) executive information system. D) EDP system. 90) ________ are the only physical items that are absolutely required for a user of cloud computing. A) A data.
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11.3   Questions 1) Most businesses prefer to use the indirect method of formatting a statement of cash flows. 2) In order to prepare a statement of cash flows using the indirect method, you need the income statement only. 3) The operating section of a statement of cash flows using the indirect method is.
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154) Presented below is a list of terms relating to accounting information systems, followed by definitions of those terms. Required: Match the letter next to each definition with the appropriate term. Each answer will be used only once. ________ 1. XBRL ________ 2. Telecommuting ________ 3. JIT ________ 4. Total quality management ________ 5. OA ________ 6..
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31) Operational transaction cycles have traditionally grouped activities of a business into six common operational processes. 32) Transactions are used by auditors to verify account balances and internal controls. 33) The internal audit function and the accounting functions should not be segregated in order to increase a company's internal control. 34) The director.
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21) In CIM systems, computers control management-designed parts of the manufacturing process. 22) Flexible manufacturing systems can be reprogrammed to produce entirely different products. 23) The process management approach aids in the management and improvement of a company's processes in order to increase customer satisfaction while ignoring the company's cost structure. 24) ERPs.
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153) Presented below is a list of terms relating to accounting information systems, followed by definitions of those terms. Required: Match the letter next to each definition with the appropriate term. Each answer will be used only once. ________ 1. Chief Information Officer ________ 2. Treasurer ________ 3. Transaction processing cycle ________ 4. Technical support.
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61) Liberty Auto reported Net Sales of $258,000, Cost of Goods Sold of $110,500, Operating Expenses of $62,400, and Income Tax Expense of 21,600. Liberty Auto's gross profit margin percentage was: A) 32.98. B) 42.83. C) 57.17. D) 24.61. 62) Hallett Industries, Inc. reported Net Sales of $306,000, Cost of Goods Sold of $192,600, Operating.
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109) The three general phases of systems development projects and the order in which they occur are A) systems design, systems implementation, and systems analysis. B) systems design, systems implementation, and systems auditing. C) systems design, systems analysis, and systems programming. D) systems analysis, systems design, and systems implementation. 110) Quick Response reader application can.
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119) The technological philosophy that emphasizes "customer satisfaction" to the point of "customer obsession" is known as A) TQP. B) EDI. C) TQM. D) TQP and TQM. 120) Which of the following is not a consumer benefit of Web commerce? A) There is no waiting for a salesperson or product information. B) There is automatic electronic encoding.
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11) Which of the following is NOT a part of financing activities? A) Paying dividends B) Issuing stock C) Paying off loans D) Buying land 12) Operating cash flows affect: A) current assets and current liabilities. B) long-term asset accounts. C) equity accounts. D) long-term liability accounts. 13) Investing cash flows affect: A) current assets and current liabilities. B) long-term asset accounts. C).
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41) EDI is a key component to quick-response technology systems. 42) The philosophy that one should do the right thing the first time is better known as TQM or TQP. 43) RFID tags are used for tracking objects within a quick-response system. 44) Only active RFID tags transmit signals containing digital information to.
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121) Which of the following ratios helps to evaluate how well a company is earning profit with the money shareholders have invested? A) Asset turnover ratio B) Return on sales C) Return on assets D) Return on equity 122) National Equipment reported the following for 2012: Net sales: $345,000 Net income: $29,600 Market price per share of common stock: $35.50 Dividends: $18,500 Average.
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99) Material requirements planning software assists management in managing A) inventories. B) overhead. C) scheduling production. D) both inventories and scheduling production. 100) The international quality-management standard credited for promoting the process management approach is the A) Six Sigma. B) ISA-95. C) ISO 9001. D) ISA-Y2K. 101) Which systems permit the reprogramming of computers to produce entirely different products in.
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11) Knowing the dollar amount of change from year-to-year in an account is less relevant than knowing the percentage change. 12) The most recent period in a horizontal analysis is called the base period. 13) Horizontal analysis is only done on the income statement. 14) The formula for determining the percentage change in.
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129) RFID tags include all of the following except A) active tags. B) passive tags. C) inactive tags. D) semi-passive tags. 130) Which of the following is not associated with lean manufacturing? A) CRM B) Toyota Production System C) Eliminating waste D) JIT 131) The following are EDI standards except A) ANSI X.12. B) AS2. C) eBXML. D) ISO-95. 132) Green IT is concerned with A).
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21) Comparing your company with a competing company in the same category of business is called benchmarking. 22) Common-size statements are useful when comparing a company's performance against that of a company of a different size. 23) Common-size statements use the same percentages that are computed during a vertical analysis, but no.
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101) A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in short-term investments and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The company's quick ratio is: A) 3.217. B) 1.550. C) 1.133. D) 0.933. 102) An acid test (quick ratio) of 0.75 would indicate: A) a ratio that would.
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91) A common-size comparative statement shows: A) dollars and percents. B) dollars only. C) percents only. D) dollar increases and decreases. 92) If total assets are $6,000, what is the common-size figure of Cash, assuming that Cash has a balance of $2,400? A) 120.0% B) 100.0% C)  40.0% D)  60.0% 93) In a common-size income statement, selling expenses are 55%..
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