Question 1

The basic purpose of bookkeeping is to:

Accepted Answer

A) Provide financial information about an economic entity. 
B) Develop the types of information best-suited to specific managerial decisions. 
C) Record the financial transactions of an economic entity. 
D) Determine the taxable income of individuals and business entities. 
A) Provide financial information about an economic entity. 
B) Develop the types of information best-suited to specific managerial decisions. 
C) Record the financial transactions of an economic entity. 
D) Determine the taxable income of individuals and business entities.

Question 2

Suppose a number of your friends have organized a company to develop and sell a new software product.They have asked you to loan them $8,000 to help get the company started,and have promised to repay your $8,000 plus 10% interest in one year.Of the following,which amount may be described as the return on your investment?

Accepted Answer

A) $8,000 
B) $800 
C) $8,800 
D) $7,200 
A) $8,000 
B) $800 
C) $8,800 
D) $7,200

Question 3

All internal control systems need to be monitored.

Accepted Answer

A) True 
 B)False

Question 4

Generally accepted accounting principles were established by the American Accounting Association in 1934 and are updated annually by Congress.

Accepted Answer

A) True 
 B)False

Question 5

Although accounting information is used by a wide variety of external parties,financial reporting is primarily directed toward the informational needs of:

Accepted Answer

A) Investors and creditors. 
B) Government agencies such as the Internal Revenue Service. 
C) Customers. 
D) Trade associations and labor unions. 
A) Investors and creditors. 
B) Government agencies such as the Internal Revenue Service. 
C) Customers. 
D) Trade associations and labor unions.

Question 6

The objectives of an accounting system include all of the following,except:

Accepted Answer

A) Interpret and record the effects of business transactions. 
B) Classify the effects of transactions to facilitate the preparation of reports. 
C) Summarize and communicate information to decision makers. 
D) Dictate the specific types of business transactions that the enterprise may engage in. 
A) Interpret and record the effects of business transactions. 
B) Classify the effects of transactions to facilitate the preparation of reports. 
C) Summarize and communicate information to decision makers. 
D) Dictate the specific types of business transactions that the enterprise may engage in.

Question 7

The statement of financial position and the income statement are one and the same.

Accepted Answer

A) True 
 B)False

Question 8

Overseeing a company's affairs to ensure that the company is managed with the best interest of shareholders in mind is called:

Accepted Answer

A) Internal control. 
B) Financial integrity. 
C) Corporate governance. 
D) The audit function. 
A) Internal control. 
B) Financial integrity. 
C) Corporate governance. 
D) The audit function.

Question 9

In the phrase "generally accepted accounting principles," the words accounting principles

Accepted Answer

A) The standards,assumptions,and concepts that serve as "ground rules" for financial reporting. 
B) Ethical standards that prohibit fraudulent or misleading financial reporting. 
C) The steps in the accounting cycle. 
D) The accounting practices authorized by the Financial Accounting Standards Board (FAS
B) . 
A) The standards,assumptions,and concepts that serve as "ground rules" for financial reporting. 
B) Ethical standards that prohibit fraudulent or misleading financial reporting. 
C) The steps in the accounting cycle. 
D) The accounting practices authorized by the Financial Accounting Standards Board (FAS
B) .

Question 10

The accounting standards and concepts used in the preparation of financial statements are called:

Accepted Answer

A) Certified principles of accounting (CP
A) . 
B) Generally accepted accounting principles (GAAP). 
C) Federal accounting standards and bylaws (FAS
B) . 
D) Standards enforcing consistency (SE
C) . 
A) Certified principles of accounting (CP
A) . 
B) Generally accepted accounting principles (GAAP). 
C) Federal accounting standards and bylaws (FAS
B) . 
D) Standards enforcing consistency (SE
C) .

Question 11

The Public Company Accounting Oversight Board is responsible for creating and promoting International Financial Reporting Standards.

Accepted Answer

A) True 
 B)False

Question 12

Of the following objectives of financial reporting,which is the most specific?

Accepted Answer

A) Provide information useful in assessing amount,timing,and uncertainty of future cash flows. 
B) Provide information useful in making investment and credit decisions. 
C) Provide information about economic resources,claims to resources,and changes in resources and claims. 
D) Provide information useful to help the enterprise achieve its goals,objectives,and mission. 
A) Provide information useful in assessing amount,timing,and uncertainty of future cash flows. 
B) Provide information useful in making investment and credit decisions. 
C) Provide information about economic resources,claims to resources,and changes in resources and claims. 
D) Provide information useful to help the enterprise achieve its goals,objectives,and mission.

Question 13

The Sarbanes-Oxley Act of 2002 created:

Accepted Answer

A) The Security and Exchange Commission. 
B) The Financial Accounting Standards Board. 
C) The Public Company Accounting Oversight Board. 
D) The Income Tax Return Overview Board. 
A) The Security and Exchange Commission. 
B) The Financial Accounting Standards Board. 
C) The Public Company Accounting Oversight Board. 
D) The Income Tax Return Overview Board.

Question 14

A statement of cash flows depicts the way profits have changed during a designated period.

Accepted Answer

A) True 
 B)False

Question 15

An accounting principle must receive substantial authoritative support to qualify as generally accepted.Among the organizations and agencies that have been influential in the development of generally accepted accounting principles,which of the following has provided the most influential leadership?

Accepted Answer

A) Internal Revenue Service. 
B) Institute of Management Accountants. 
C) Financial Accounting Standards Board. 
D) New York Stock Exchange. 
A) Internal Revenue Service. 
B) Institute of Management Accountants. 
C) Financial Accounting Standards Board. 
D) New York Stock Exchange.

Question 16

The best definition of an accounting system is:

Accepted Answer

A) Journals,ledgers,and worksheets. 
B) Manual or computer-based records used in developing information about an entity for use by managers and also persons outside the organization. 
C) The personnel,procedures,devices,and records used by an entity to develop accounting information and communicate this information to decision makers. 
D) The concepts,principles,and standards specifying the information which should be included in financial statements,and how that information should be presented. 
A) Journals,ledgers,and worksheets. 
B) Manual or computer-based records used in developing information about an entity for use by managers and also persons outside the organization. 
C) The personnel,procedures,devices,and records used by an entity to develop accounting information and communicate this information to decision makers. 
D) The concepts,principles,and standards specifying the information which should be included in financial statements,and how that information should be presented.

Question 17

AICPA Code of Professional Conduct
State and discuss the six articles of the AICPA Code of Professional Conduct that guide members in performing their professional responsibilities.

Accepted Answer

(I.)Responsibilities - members should ex

Question 18

Investors and creditors are interested in a company's "cash flow prospects." What two specific concerns of investors and creditors are summarized by the term "cash flow prospects?"

Accepted Answer

Return of

Question 19

Which of the following are not considered "external" users of financial statements?

Accepted Answer

A) Owners. 
B) Creditors. 
C) Labor unions. 
D) Managers. 
A) Owners. 
B) Creditors. 
C) Labor unions. 
D) Managers.

Question 20

The SEC requires corporate officers to sign the Form 10-K,which is filed annually with the SEC.Which of the following officers is not among those required to sign?

Accepted Answer

A) CEO (Chief Executive Officer). 
B) CAO (Chief Accounting Officer). 
C) CFO (Chief Financial Officer). 
D) COO (Chief Operating Officer). 
A) CEO (Chief Executive Officer). 
B) CAO (Chief Accounting Officer). 
C) CFO (Chief Financial Officer). 
D) COO (Chief Operating Officer).

Exam 1: Accounting: Information for Decision Making

The basic purpose of bookkeeping is to:

All internal control systems need to be monitored.

Generally accepted accounting principles were established by the American Accounting Association in 1934 and are updated annually by Congress.

Although accounting information is used by a wide variety of external parties,financial reporting is primarily directed toward the informational needs of:

The objectives of an accounting system include all of the following,except:

The statement of financial position and the income statement are one and the same.

Overseeing a company's affairs to ensure that the company is managed with the best interest of shareholders in mind is called:

In the phrase "generally accepted accounting principles," the words accounting principles

The accounting standards and concepts used in the preparation of financial statements are called:

The Public Company Accounting Oversight Board is responsible for creating and promoting International Financial Reporting Standards.

Of the following objectives of financial reporting,which is the most specific?

The Sarbanes-Oxley Act of 2002 created:

A statement of cash flows depicts the way profits have changed during a designated period.

An accounting principle must receive substantial authoritative support to qualify as generally accepted.Among the organizations and agencies that have been influential in the development of generally accepted accounting principles,which of the following has provided the most influential leadership?

The best definition of an accounting system is:

AICPA Code of Professional Conduct State and discuss the six articles of the AICPA Code of Professional Conduct that guide members in performing their professional responsibilities.

Investors and creditors are interested in a company's "cash flow prospects." What two specific concerns of investors and creditors are summarized by the term "cash flow prospects?"

Which of the following are not considered "external" users of financial statements?

The SEC requires corporate officers to sign the Form 10-K,which is filed annually with the SEC.Which of the following officers is not among those required to sign?

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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