Guillermo is currently in the process of projecting how much his firm will have to spend on supplies, travel, rent, advertising, and salaries for the coming financial year. Guillermo is working on the:

a) capital budget.

b) advertising budget.

c) operating (master) budget.

d) cash budget.

Answer: C

Jackie Jones is a finance manager for Pretty Poseys, a wholesale florist. As finance manager, which of the following would be one of Jackie's responsibilities?

a) Preparing tax returns

b) Preparing financial statements

c) Planning for spending funds on long-term assets, such as plant and equipment

d) Production planning and resource development

Answer: C

Which of the following is true of the use of computers in accounting?

a) Computers can free up accountants to do important tasks, such as financial analysis and forecasting.

b) Computers have been programmed to make their own financial decisions.

c) Computerized accounting systems have actually made the accounting process slightly more complicated because of the need to understand the software.

d) Computerized accounting systems are primarily used only in large corporations.

Answer: A

Which of the following would be considered a current asset?

a) Accounts payable

b) Copyrights

c) Buildings

d) Accounts receivable

Answer: D

The following information is listed on Beck's Bicycles, Inc.'s balance sheet as of 12/30/2015.

Assets Liabilities

Current Assets Current Liabilities

Cash $3,000,000.00 Accts. Payable $12,000,000.00

Accts. Receivables 2,000,000.00

Inventory 9,000,000.00

Total Current Assets $14,000,000.00 Total Current Liabilities $12,000,000.00

Fixed Assets $125,000,000.00 Long-Term Debt $75,000,0000.00

If you were one of Beck's accountants and you were asked to evaluate if the firm has enough funds to pay its bills that are coming due in the next few months, how would you respond?

a) Beck's does not have enough funds to pay bills that are coming due because it has $3 million in cash, and it owes $87,000,000 in the next few months.

b) Beck's will not have enough funds to pay bills coming due in the next few months because it cannot depend on selling inventory to pay those bills. It must depend only on cash and credit sales already produced. Total cash and credit sales are only $5 million.

c) Beck's has enough funds to pay bills that are coming due because it has $3 million in cash assets.

d) Beck's will have enough funds to pay bills coming due in the next few months, as long as it continues to collect money that others owe Beck's and it continues to turn its inventory and sell bikes.

Answer: D

Celia's boss asked her to determine if their company is operating with too many borrowed funds. Which ratio will Celia utilize to help her with her decision?

a) Inventory turnover

b) Liquidity

c) Profitability

d) Leverage

Answer: D