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Practice Quiz 4 with key

Practice Quiz 4 with key - test 4 Student Multiple Choice...

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test 4 Student: ___________________________________________________________________________ Multiple Choice Questions 1. Horst works as an accountant for a mid-sized retail store. He has just completed a trial balance that turned up no unexpected problems. Horst's next major task is likely to be: A. conducting the full audit.B. preparing a tax return for the company.C. preparing the store's balance sheet and other major financial statements.D. taking a well deserved vacation, since he has just finished the last step in the accounting cycle for the current period. 2. Taylor Casual, a chain of retail clothing stores, wants to assure investors and other outsiders that its financial statements are accurate. One way to do so would be to hire a public accounting firm to: A. produce an internal audit.B. take over all of its accounting functions.C. provide a "generally accepted practices" endorsement. D. perform an independent audit. 3. Ralph owns a small business. Some friends have suggested that he should switch from his current manual accounting system to one that is computerized. Ralph is not certain he wants to use computers in his small firm's accounting system. He is concerned about the time it would take in learning the system, and wonders whether the benefits will justify the costs of setting up the system. As a small business owner, Ralph would probably find that: A. computer software tends to be very helpful to small business owners who lack strong accounting support within their companies.B. today's accounting software tends to be very complex, so only people with extensive accounting experience can understand its features and use it effectively.C. even though it is not yet cost effective, he should go ahead and adopt a computerized system, because government regulations will require most business functions to be computerized in the near future.D. such systems actually reduce costs, because they eliminate the need to ever consult with an accountant. 4. We would expect the inventory turnover ratio for a ski shop to be _______ than the turnover for a convenience store. A. higherB. more meaningfulC. lowerD. less helpful 5. Generally the higher the risk involved in an activity, the ________ the rate of return expected by investors. A. higherB. lowerC. more stableD. less frequent 6. As Hector was packing to return to State University after his summer vacation, he realized that he owned many valuable things such as a laptop computer, a stereo system, and a DVD player. An accountant would list
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all of these as Hector's: A. assets.B. liabilities.C. owners' equity.D. intangibles. 7. Many business decisions are made in hopes of improving a firm's "bottom line." Which of the following financial statements will reflect a firm's "bottom line"? A. income statementB. balance sheetC. statement of cash flowsD. trial balance 8. One difference between accounting and other business functions, such as marketing and management, is that: A. accounting functions must be performed by an "outsider" (rather than by an employee of the business) in order to avoid conflicts of interest.B. life offers us very little experience with accounting concepts.C. accounting
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