Question 1

Investors may be described as:

Accepted Answer

A) Individuals and enterprises that have provided credit to a reporting entity. 
B) Individuals and enterprises that own a reporting entity business. 
C) Anyone that has an interest in the results of the operations of the reporting entity. 
D) Those whose primary economic activity consists of buying and selling stocks and bonds. 
A) Individuals and enterprises that have provided credit to a reporting entity. 
B) Individuals and enterprises that own a reporting entity business. 
C) Anyone that has an interest in the results of the operations of the reporting entity. 
D) Those whose primary economic activity consists of buying and selling stocks and bonds.

Question 2

Financial statements are prepared:

Accepted Answer

A) Only for publicly owned business organizations. 
B) For corporations,but not for sole proprietorships or partnerships. 
C) Primarily for the benefit of persons outside of the business organization. 
D) In either monetary or nonmonetary terms,depending upon the need of the decision maker. 
A) Only for publicly owned business organizations. 
B) For corporations,but not for sole proprietorships or partnerships. 
C) Primarily for the benefit of persons outside of the business organization. 
D) In either monetary or nonmonetary terms,depending upon the need of the decision maker.

Question 3

Investors and creditors are interested in the probability that their original investment or loan will eventually be returned,and that they will receive a reasonable return while their funds are invested or borrowed.These expectations are collectively

Accepted Answer

A) Expected profitability. 
B) The objectives of financial reporting. 
C) Cash flow prospects. 
D) Financial position. 
A) Expected profitability. 
B) The objectives of financial reporting. 
C) Cash flow prospects. 
D) Financial position.

Question 4

The Code of Ethics of the AICPA calls for a member in public practice to be independent in fact and appearance when providing auditing services.

Accepted Answer

A) True 
 B)False

Question 5

List the three financial statements that are used to communicate financial accounting information to interested external parties.

Accepted Answer

Balance sheet (State

Question 6

Which of the following decision makers is least likely to be among the users of management accounting reports developed by Sears Roebuck and Co.?

Accepted Answer

A) The chief executive officer of Sears. 
B) The manager of the Automotive Department in a Sears' store. 
C) The manager of a mutual fund considering investing in Sears' common stock. 
D) Internal auditors within the Sears organization. 
A) The chief executive officer of Sears. 
B) The manager of the Automotive Department in a Sears' store. 
C) The manager of a mutual fund considering investing in Sears' common stock. 
D) Internal auditors within the Sears organization.

Question 7

Which of the following is not characteristic of financial accounting?

Accepted Answer

A) Information used in financial statements is prepared in conformity with generally accepted accounting principles. 
B) The information is confidential and is intended for use only by company management. 
C) The information is used in a wide variety of business decisions. 
D) The information is developed primarily by "private accountants" that is,accountants employed by business organizations. 
A) Information used in financial statements is prepared in conformity with generally accepted accounting principles. 
B) The information is confidential and is intended for use only by company management. 
C) The information is used in a wide variety of business decisions. 
D) The information is developed primarily by "private accountants" that is,accountants employed by business organizations.

Question 8

The primary function of external auditors is to:

Accepted Answer

A) Express an opinion on the fairness of the company's financial statements. 
B) Determine the accuracy of the management reports. 
C) Evaluate the efficiency of operations and the degree of compliance with management's policies in all departments within a large organization. 
D) Determine that financial statements and all special reports to management are prepared in conformity with generally accepted accounting principles. 
A) Express an opinion on the fairness of the company's financial statements. 
B) Determine the accuracy of the management reports. 
C) Evaluate the efficiency of operations and the degree of compliance with management's policies in all departments within a large organization. 
D) Determine that financial statements and all special reports to management are prepared in conformity with generally accepted accounting principles.

Question 9

The work of accountants practicing in public accounting may best be described as:

Accepted Answer

A) Providing various types of accounting services to a wide variety of clients. 
B) Preparing income tax returns for individuals and small businesses. 
C) Developing and interpreting information tailored to the needs of business managers. 
D) Helping governmental agencies carry out their various regulatory responsibilities. 
A) Providing various types of accounting services to a wide variety of clients. 
B) Preparing income tax returns for individuals and small businesses. 
C) Developing and interpreting information tailored to the needs of business managers. 
D) Helping governmental agencies carry out their various regulatory responsibilities.

Question 10

One purpose of generally accepted accounting principles is to make accounting information prepared by different companies more comparable.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a characteristic of financial accounting information?

Accepted Answer

A) Its preparation requires judgment. 
B) It is more about the future than it is about the past. 
C) None of it is based on estimates,assumptions,and judgments. 
D) Notes and explanations from management are not included. 
A) Its preparation requires judgment. 
B) It is more about the future than it is about the past. 
C) None of it is based on estimates,assumptions,and judgments. 
D) Notes and explanations from management are not included.

Question 12

An accounting practice can become a "generally accepted accounting principle" through widespread use,even if the practice is not mentioned in the official pronouncements of the accounting standard-setting organizations.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an important factor in ensuring the integrity of accounting information?

Accepted Answer

A) Institutional factors,such as standards for preparing information. 
B) Professional organizations,such as the American Institute of CPAs. 
C) Competence,judgment,and ethical behavior of individual accountants. 
D) The cost of preparing the financial information. 
A) Institutional factors,such as standards for preparing information. 
B) Professional organizations,such as the American Institute of CPAs. 
C) Competence,judgment,and ethical behavior of individual accountants. 
D) The cost of preparing the financial information.

Question 14

In 2012 the SEC issued an extensive report regarding the use of IFRS by U.S.public companies and listed which of the following as a major obstacle to adopting IASB standards?

Accepted Answer

A) IASB standards are generally viewed as low quality. 
B) IASB's dependence on funding from the major accounting firms. 
C) Cross-border financing is decreasing in popularity. 
D) The IASB is not a governmental agency and therefore is not positioned to develop accounting standards. 
A) IASB standards are generally viewed as low quality. 
B) IASB's dependence on funding from the major accounting firms. 
C) Cross-border financing is decreasing in popularity. 
D) The IASB is not a governmental agency and therefore is not positioned to develop accounting standards.

Question 15

The Sarbanes-Oxley Act places responsibility on CEOs and CFOs of companies to certify the fairness of company's financial statements.The Act also created the Public Company Accounting Oversight Board which oversees the public accounting profession.

Accepted Answer

A) True 
 B)False

Question 16

The IRS tax return is one of the primary financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is considered a return "on" investment?

Accepted Answer

A) Dividends. 
B) Repayment of a loan. 
C) Purchase of an asset. 
D) Securing a loan. 
A) Dividends. 
B) Repayment of a loan. 
C) Purchase of an asset. 
D) Securing a loan.

Question 18

Investors are individuals and other enterprises that have provided equity to the reporting enterprise.

Accepted Answer

A) True 
 B)False

Question 19

The auditor's report on the published financial statements of a large corporation should be viewed as:

Accepted Answer

A) The opinion of independent experts as to the overall fairness of the statements. 
B) The opinion of the corporation's chief accountant as to the overall fairness of the statements. 
C) A guarantee by a firm of certified public accountants that the statements are accurate. 
D) A guarantee by the Financial Statements Insurance Board that the statements do not overstate assets or net income. 
A) The opinion of independent experts as to the overall fairness of the statements. 
B) The opinion of the corporation's chief accountant as to the overall fairness of the statements. 
C) A guarantee by a firm of certified public accountants that the statements are accurate. 
D) A guarantee by the Financial Statements Insurance Board that the statements do not overstate assets or net income.

Question 20

Which of the following is not a basic function of an accounting system?

Accepted Answer

A) To interpret and record the effects of business transactions. 
B) To classify the effects of similar transactions in a manner that permits determination of various totals and subtotals useful to management. 
C) To ensure that a business organization will be managed profitably. 
D) To summarize and communicate information to decision makers. 
A) To interpret and record the effects of business transactions. 
B) To classify the effects of similar transactions in a manner that permits determination of various totals and subtotals useful to management. 
C) To ensure that a business organization will be managed profitably. 
D) To summarize and communicate information to decision makers.

Exam 1: Accounting: Information for Decision Making

Investors may be described as:

Financial statements are prepared:

Investors and creditors are interested in the probability that their original investment or loan will eventually be returned,and that they will receive a reasonable return while their funds are invested or borrowed.These expectations are collectively

The Code of Ethics of the AICPA calls for a member in public practice to be independent in fact and appearance when providing auditing services.

List the three financial statements that are used to communicate financial accounting information to interested external parties.

Which of the following decision makers is least likely to be among the users of management accounting reports developed by Sears Roebuck and Co.?

Which of the following is not characteristic of financial accounting?

The primary function of external auditors is to:

The work of accountants practicing in public accounting may best be described as:

One purpose of generally accepted accounting principles is to make accounting information prepared by different companies more comparable.

Which of the following is a characteristic of financial accounting information?

An accounting practice can become a "generally accepted accounting principle" through widespread use,even if the practice is not mentioned in the official pronouncements of the accounting standard-setting organizations.

Which of the following is not an important factor in ensuring the integrity of accounting information?

In 2012 the SEC issued an extensive report regarding the use of IFRS by U.S.public companies and listed which of the following as a major obstacle to adopting IASB standards?

The Sarbanes-Oxley Act places responsibility on CEOs and CFOs of companies to certify the fairness of company's financial statements.The Act also created the Public Company Accounting Oversight Board which oversees the public accounting profession.

The IRS tax return is one of the primary financial statements.

Which of the following is considered a return "on" investment?

Investors are individuals and other enterprises that have provided equity to the reporting enterprise.

The auditor's report on the published financial statements of a large corporation should be viewed as:

Which of the following is not a basic function of an accounting system?

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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