Question 1

Which of the following does not describe accounting?

Accepted Answer

A) It is commonly referred to as the language of business. 
B) It is an end rather than a means to an end. 
C) It is useful for decision-making. 
D) It is used by businesses,governments,non-profit organizations,and individuals. 
A) It is commonly referred to as the language of business. 
B) It is an end rather than a means to an end. 
C) It is useful for decision-making. 
D) It is used by businesses,governments,non-profit organizations,and individuals. B

Question 2

Which financial statement is primarily concerned with reporting the financial position of a business at a particular time?

Accepted Answer

A) The balance sheet. 
B) The income statement. 
C) The statement of cash flows. 
D) All three statements are concerned with the financial position of a business at a particular time. 
A) The balance sheet. 
B) The income statement. 
C) The statement of cash flows. 
D) All three statements are concerned with the financial position of a business at a particular time. A

Question 3

Today,the most authoritative source of generally accepted accounting principles is the American Accounting Association.

Accepted Answer

A) True 
 B)False  False

Question 4

Financial accounting information is:

Accepted Answer

A) Designed to assist investors and creditors. 
B) Not used by managers and in income tax returns. 
C) Called "special-purpose" accounting information. 
D) Not applicable to individuals. 
A) Designed to assist investors and creditors. 
B) Not used by managers and in income tax returns. 
C) Called "special-purpose" accounting information. 
D) Not applicable to individuals.

Question 5

Which of the following is generally not considered an external user of accounting information?

Accepted Answer

A) Stockholders of a corporation. 
B) Bank lending officers. 
C) Financial analysts. 
D) Factory managers. 
A) Stockholders of a corporation. 
B) Bank lending officers. 
C) Financial analysts. 
D) Factory managers.

Question 6

External users of accounting information have a financial interest in an entity but are not involved with the day-to-day operations of the enterprise.

Accepted Answer

A) True 
 B)False

Question 7

Objectives of financial reporting to external investors and creditors include preparing information about all of the following except:

Accepted Answer

A) Information used to determine which products to produce. 
B) Information about economic resources,claims to those resources,and changes in both resources and claims. 
C) Information that is useful in assessing the amount,timing,and uncertainty of future cash flows. 
D) Information that is useful in making investment and credit decisions. 
A) Information used to determine which products to produce. 
B) Information about economic resources,claims to those resources,and changes in both resources and claims. 
C) Information that is useful in assessing the amount,timing,and uncertainty of future cash flows. 
D) Information that is useful in making investment and credit decisions.

Question 8

Generally accepted accounting principles are intended to assist accountants in preparing financial statements that:

Accepted Answer

A) Are relevant,verifiable,comparable,and understandable. 
B) Show the business to be both solvent and profitable. 
C) Comply with all income tax rules and regulations. 
D) Are ideally suited to the specific needs of each user of the financial statements. 
A) Are relevant,verifiable,comparable,and understandable. 
B) Show the business to be both solvent and profitable. 
C) Comply with all income tax rules and regulations. 
D) Are ideally suited to the specific needs of each user of the financial statements.

Question 9

The principal difference between management accounting and financial accounting is that financial accounting information is:

Accepted Answer

A) Prepared by managers. 
B) Intended primarily for use by decision makers outside the business organization. 
C) Prepared in accordance with a set of accounting principles developed by the Institute of Certified Management Accountants. 
D) Oriented toward measuring solvency rather than profitability. 
A) Prepared by managers. 
B) Intended primarily for use by decision makers outside the business organization. 
C) Prepared in accordance with a set of accounting principles developed by the Institute of Certified Management Accountants. 
D) Oriented toward measuring solvency rather than profitability.

Question 10

Which of the following is generally not considered one of the general purpose financial statements issued by a corporation?

Accepted Answer

A) Income statement forecast for the coming year. 
B) Balance sheet. 
C) Statement of financial position. 
D) Statement of cash flows. 
A) Income statement forecast for the coming year. 
B) Balance sheet. 
C) Statement of financial position. 
D) Statement of cash flows.

Question 11

One of the principal functions of CPAs is to:

Accepted Answer

A) Audit income tax returns to determine if taxpayers have underpaid their income taxes. 
B) Conduct audits to determine whether the employees of a business are performing their jobs honestly and efficiently. 
C) Advise individual investors on stock market investments. 
D) Perform audits to determine the fairness of a company's financial statements. 
A) Audit income tax returns to determine if taxpayers have underpaid their income taxes. 
B) Conduct audits to determine whether the employees of a business are performing their jobs honestly and efficiently. 
C) Advise individual investors on stock market investments. 
D) Perform audits to determine the fairness of a company's financial statements.

Question 12

Internal users of financial accounting information include all of the following except:

Accepted Answer

A) Investors. 
B) Managers. 
C) Chief Financial Officer. 
D) Chief Executive Officer. 
A) Investors. 
B) Managers. 
C) Chief Financial Officer. 
D) Chief Executive Officer.

Question 13

Return on investment is the same as return of investment.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true?

Accepted Answer

A) The existence of generally accepted accounting principles (GAAP)virtually eliminates the need for professional judgment except in very unusual circumstances. 
B) Federal securities laws regarding the issuance of misleading financial statements apply not only to the independent auditors,but to management of the company as well. 
C) Attaining a passing score on the part of the Uniform CPA Examination that covers professional ethics is evidence of integrity and commitment to ethical conduct. 
D) A professional accountant should resign his position rather than become involved in the distribution of financial statements indicating insolvency. 
A) The existence of generally accepted accounting principles (GAAP)virtually eliminates the need for professional judgment except in very unusual circumstances. 
B) Federal securities laws regarding the issuance of misleading financial statements apply not only to the independent auditors,but to management of the company as well. 
C) Attaining a passing score on the part of the Uniform CPA Examination that covers professional ethics is evidence of integrity and commitment to ethical conduct. 
D) A professional accountant should resign his position rather than become involved in the distribution of financial statements indicating insolvency.

Question 15

Provide a brief example to illustrate that externally reported financial accounting information must be based in part on estimates,judgments,and assumptions.

Accepted Answer

To account for the use of long

Question 16

The designation of CPA is given by:

Accepted Answer

A) Universities. 
B) States. 
C) The AICPA. 
D) The SEC. 
A) Universities. 
B) States. 
C) The AICPA. 
D) The SEC.

Question 17

Public accounting is the segment of the profession where professionals offer audit,tax,and consulting services to clients.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is considered a "snapshot" of the business in financial or dollar terms?

Accepted Answer

A) Statement of financial position. 
B) Statement of cash flows. 
C) Income statement. 
D) The federal income tax return. 
A) Statement of financial position. 
B) Statement of cash flows. 
C) Income statement. 
D) The federal income tax return.

Question 19

Which of the following is not an objective of generally accepted accounting principles?

Accepted Answer

A) To minimize the amount of income taxes owed. 
B) To ensure that both preparers and users of financial statements understand the concepts and assumptions used in presenting information within these statements. 
C) To enhance the relevance and verifiability of information contained in financial statements. 
D) To increase the comparability of financial statements prepared by different companies. 
A) To minimize the amount of income taxes owed. 
B) To ensure that both preparers and users of financial statements understand the concepts and assumptions used in presenting information within these statements. 
C) To enhance the relevance and verifiability of information contained in financial statements. 
D) To increase the comparability of financial statements prepared by different companies.

Question 20

Financial accounting information is characterized by all of the following except:

Accepted Answer

A) It is historical in nature. 
B) It results from inexact and approximate measures. 
C) It is factual,so it does not require judgment to prepare. 
D) It is enhanced by management's explanation. 
A) It is historical in nature. 
B) It results from inexact and approximate measures. 
C) It is factual,so it does not require judgment to prepare. 
D) It is enhanced by management's explanation.

Exam 1: Accounting: Information for Decision Making

Which of the following does not describe accounting?

Which financial statement is primarily concerned with reporting the financial position of a business at a particular time?

Today,the most authoritative source of generally accepted accounting principles is the American Accounting Association.

Financial accounting information is:

Which of the following is generally not considered an external user of accounting information?

External users of accounting information have a financial interest in an entity but are not involved with the day-to-day operations of the enterprise.

Objectives of financial reporting to external investors and creditors include preparing information about all of the following except:

Generally accepted accounting principles are intended to assist accountants in preparing financial statements that:

The principal difference between management accounting and financial accounting is that financial accounting information is:

Which of the following is generally not considered one of the general purpose financial statements issued by a corporation?

One of the principal functions of CPAs is to:

Internal users of financial accounting information include all of the following except:

Return on investment is the same as return of investment.

Which of the following is true?

Provide a brief example to illustrate that externally reported financial accounting information must be based in part on estimates,judgments,and assumptions.

The designation of CPA is given by:

Public accounting is the segment of the profession where professionals offer audit,tax,and consulting services to clients.

Which of the following statements is considered a "snapshot" of the business in financial or dollar terms?

Which of the following is not an objective of generally accepted accounting principles?

Financial accounting information is characterized by all of the following except:

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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