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