Question 1

Which of the following events is not a transaction that would be recorded in a company's accounting records?

Accepted Answer

A) The purchase of equipment for cash. 
B) The purchase of equipment on account. 
C) The investment of additional cash in the business by the owner. 
D) The death of a key executive. 
A) The purchase of equipment for cash. 
B) The purchase of equipment on account. 
C) The investment of additional cash in the business by the owner. 
D) The death of a key executive.

Question 2

Accounting Terminology
Listed below are 8 accounting terms.   Each of the following statements may (or may not)describe one of these terms.In the space provided,indicate the accounting term described or answer "None" if the statement does not accurately describe any of the terms.
(A.)Information describing the financial resources,obligations,and activities of an economic entity.
(B.)An entity's financial resources and obligations at a point in time.
(C.)Accounting information intended specifically to assist company's management.
(D.)The personnel,procedures,and technology used by an organization to develop accounting information and to communicate this information to decision makers.
(E.)An entity's financial activities during the year.
(F.)Measures used by an organization to guard against errors,waste,and fraud and to assure the reliability of accounting information.
(G.)A plan of financial operations for some future period.
(H.)A written assertion identifying,measuring,and communicating financial information about an economic entity.

Accepted Answer

(A)Financial Accounting (B)Fin

Question 3

The basic purpose of an audit is to:

Accepted Answer

A) Assure financial statements are in conformity with GAAP. 
B) Provide as much useful information to decision makers as possible,regardless of cost. 
C) Record changes in the financial position of an organization by applying the concepts of double entry accounting. 
D) Meet an organization's need for accounting information as efficiently as possible. 
A) Assure financial statements are in conformity with GAAP. 
B) Provide as much useful information to decision makers as possible,regardless of cost. 
C) Record changes in the financial position of an organization by applying the concepts of double entry accounting. 
D) Meet an organization's need for accounting information as efficiently as possible.

Question 4

Management accounting information is oriented toward the future while financial accounting information is historical in nature.

Accepted Answer

A) True 
 B)False

Question 5

Accounting terminology
Listed below are nine accounting terms introduced in this chapter:   Each of the following statements may (or may not)describe one of these terms.In the space provided below each statement,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms.More than one statement may describe a single term.
(A.)The repayment to an investor of the amount originally invested in an enterprise.
(B.)An examination of financial statements designed to determine their fairness in relation to generally accepted accounting principles.
(C.)The accounting standards and concepts used in the preparation of financial statements.
(D.)A system of measures designed to assure management that all aspects of the business are operating according to plan.
(E.)A listing of assets,liabilities,and stockholders' equity as of a specific date.
(F.)The payment of an amount for using another's money.
(G.)An activity statement that shows the details of the company's activities involving cash during a period of time.

Accepted Answer

(A.)Return of investment; (B.)

Question 6

Which organization best serves the professional needs of a CPA?

Accepted Answer

A) FASB. 
B) AICPA. 
C) SEC. 
D) AAA. 
A) FASB. 
B) AICPA. 
C) SEC. 
D) AAA.

Question 7

The FASB takes on a responsibility to do the following,except:

Accepted Answer

A) Set the objectives of financial reporting. 
B) Describe the elements of financial statements. 
C) Judge disputes between management and the CPA. 
D) Determine the criteria for deciding what information to include in financial statements. 
A) Set the objectives of financial reporting. 
B) Describe the elements of financial statements. 
C) Judge disputes between management and the CPA. 
D) Determine the criteria for deciding what information to include in financial statements.

Question 8

The CPA examination is administered by the General Accounting Office of the U.S.Government.

Accepted Answer

A) True 
 B)False

Question 9

Management accounting information is oriented toward the future while financial accounting information is historical in nature.

Accepted Answer

A) True 
 B)False

Question 10

The annual financial statements of large corporations such as Microsoft or PepsiCo need not be audited by independent certified public accountants,since these firms maintain large accounting departments as part of their organizations.

Accepted Answer

A) True 
 B)False

Question 11

The basic purpose of generally accepted accounting principles is to:

Accepted Answer

A) Minimize the possibility of a business becoming insolvent. 
B) Provide a framework for financial reporting that is understood by both the preparers and the users of financial statements. 
C) Ensure that financial statements include the type of information that is best suited to every type of business decision. 
D) Eliminate the need for professional judgment in preparing financial statements. 
A) Minimize the possibility of a business becoming insolvent. 
B) Provide a framework for financial reporting that is understood by both the preparers and the users of financial statements. 
C) Ensure that financial statements include the type of information that is best suited to every type of business decision. 
D) Eliminate the need for professional judgment in preparing financial statements.

Question 12

Development of generally accepted accounting principles
(A.)What is meant by the phrase "generally accepted accounting principles"?
(B.)Give the names of three organizations that currently play an active role in the development of accounting principles in the United States.

Accepted Answer

(A.)Generally accepted accounting princi

Question 13

Which financial statement is prepared as of a specific date?

Accepted Answer

A) The balance sheet 
B) The income statement 
C) The statement of cash flows 
D) The balance sheet,income statement,and statement of cash flows are all for a period of time rather than at a specific date. 
A) The balance sheet 
B) The income statement 
C) The statement of cash flows 
D) The balance sheet,income statement,and statement of cash flows are all for a period of time rather than at a specific date.

Question 14

The Financial Accounting Standards Board is:

Accepted Answer

A) Responsible for the review and audit of federal income tax returns. 
B) Primarily concerned with the preparation of the annual federal budget. 
C) A private group that conducts research and determines generally accepted accounting principles. 
D) A government agency with legal authority to approve or disapprove the financial statements of corporations that sell their securities to the public. 
A) Responsible for the review and audit of federal income tax returns. 
B) Primarily concerned with the preparation of the annual federal budget. 
C) A private group that conducts research and determines generally accepted accounting principles. 
D) A government agency with legal authority to approve or disapprove the financial statements of corporations that sell their securities to the public.

Question 15

Information is cost effective when:

Accepted Answer

A) The information aids management in controlling costs. 
B) The information is based upon historical costs,rather than upon estimated market values. 
C) The value of the information exceeds the cost of producing it. 
D) The information is generated by a computer based accounting system. 
A) The information aids management in controlling costs. 
B) The information is based upon historical costs,rather than upon estimated market values. 
C) The value of the information exceeds the cost of producing it. 
D) The information is generated by a computer based accounting system.

Question 16

Accounting terminology
Listed below are seven accounting organizations introduced in this chapter:   Each of the following statements may (or may not)describe one of these organizations.In the space provided below each statement,indicate the accounting organization described,or answer "None" if the statement does not correctly describe any of the organizations.
(A.)Private sector organization that establishes accounting standards.
(B.)A professional organization that establishes standards for the conduct of professional services other than audits.
(C.)A government organization that establishes financial reporting requirements for publicly-held companies in the United States.
(D.)A federal government agency that audits many other agencies of the federal government and reports its findings to Congress.
(E.)A professional organization dedicated to the improvement of accounting education,research,and practice.
(F.)A professional organization that influences the concepts and ethical practice of management accounting.
(G.)A professional organization that establishes global accounting standards.

Accepted Answer

(A.)Financial Accounting Standards Board

Question 17

Financial statements
Briefly describe the balance sheet,the income statement,and the statement of cash flows.

Accepted Answer

Balance sheet (statement of financial po

Question 18

The accounting systems of most business organizations:

Accepted Answer

A) Are tailored to meet the organization's needs for accounting information and the resources available for operating the system. 
B) Are similar in design to the journals,ledgers,and worksheets illustrated in this text. 
C) Utilize data bases,rather than ledger accounts. 
D) Are designed by the CPA firm that performs the annual financial audit. 
A) Are tailored to meet the organization's needs for accounting information and the resources available for operating the system. 
B) Are similar in design to the journals,ledgers,and worksheets illustrated in this text. 
C) Utilize data bases,rather than ledger accounts. 
D) Are designed by the CPA firm that performs the annual financial audit.

Question 19

Establishing international accounting standards is the responsibility of:

Accepted Answer

A) AICPA. 
B) IASB. 
C) SEC. 
D) AAA. 
A) AICPA. 
B) IASB. 
C) SEC. 
D) AAA.

Question 20

Audits of financial statements are performed by:

Accepted Answer

A) The controller of the reporting company. 
B) The Financial Accounting Standards Board (FAS
B) . 
C) The management of the reporting company. 
D) Independent certified public accountants (CPAs). 
A) The controller of the reporting company. 
B) The Financial Accounting Standards Board (FAS
B) . 
C) The management of the reporting company. 
D) Independent certified public accountants (CPAs).

Exam 1: Accounting: Information for Decision Making

Which of the following events is not a transaction that would be recorded in a company's accounting records?

The basic purpose of an audit is to:

Management accounting information is oriented toward the future while financial accounting information is historical in nature.

Which organization best serves the professional needs of a CPA?

The FASB takes on a responsibility to do the following,except:

The CPA examination is administered by the General Accounting Office of the U.S.Government.

Management accounting information is oriented toward the future while financial accounting information is historical in nature.

The annual financial statements of large corporations such as Microsoft or PepsiCo need not be audited by independent certified public accountants,since these firms maintain large accounting departments as part of their organizations.

The basic purpose of generally accepted accounting principles is to:

Development of generally accepted accounting principles (A.)What is meant by the phrase "generally accepted accounting principles"? (B.)Give the names of three organizations that currently play an active role in the development of accounting principles in the United States.

Which financial statement is prepared as of a specific date?

The Financial Accounting Standards Board is:

Information is cost effective when:

Financial statements Briefly describe the balance sheet,the income statement,and the statement of cash flows.

The accounting systems of most business organizations:

Establishing international accounting standards is the responsibility of:

Audits of financial statements are performed by:

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

Filters