Question

QUESTION 33

1. Which of the following statements is FALSE?

		NAICS and SIC codes are essentially the same thing
		NAICS and SIC codes classify businesses to collect, analyze and publish statistical data related to the US economy
		SIC codes are no longer used in the US
		NAICS codes were jointly created by the US, Canada, and Mexico

QUESTION 34

1. Which of the following ratios compares total debt to total owners’ equity to evaluate the ability to meet long-term obligations

		Return on Sales
		Accounts payable turnover
		Current ratio
		Debt to equity ratio

QUESTION 37

The FASB enforces GAAP which is set by the SEC

True

False

QUESTION 38

1. What makes information useful?

		It is extremely detailed, no matter how much it costs to collect it
		It is easy to obtain
		It is interesting, even when it is not exactly relevant to decision making
		It is reliable, you can trust it to make a decision

Answer 1

33) NAICS and SIC are industry classification codes used in the US. the former was jointly developed by the US, Canada, Mexico. SIC codes are still in use in the US (eg SEC). Hence, third statement is false

34) debt to equity ratio = total debt / shareholder's equity and is the correct answer.

return on sales = operating income / sales

accounts payable turnover = purchases / average accounts payable

current ratio = current assets / current liabilities

37) SEC enforces GAAP set by FASB. Hence, given statemetn is false

38) To be useful, information must be cost effective, easy to obtain, relevant, and reliable