Question 1

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 2

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,technology,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,technology,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 3

The body created by the Sarbanes Oxley Act and charged with oversight of the accounting profession is the:

Accepted Answer

A) Public Company Accounting Oversight Board. 
B) Auditing Standards Board. 
C) International Accounting Standards Board. 
D) Securities and Exchange Commission. 
A) Public Company Accounting Oversight Board. 
B) Auditing Standards Board. 
C) International Accounting Standards Board. 
D) Securities and Exchange Commission.

Question 4

Financial statements are designed primarily to:

Accepted Answer

A) Provide managers with detailed information tailored to the managers' specific information needs. 
B) Provide people outside the business organization with information about the company's financial position and operating results. 
C) Report to the Internal Revenue Service the company's taxable income. 
D) Indicate to investors in a particular company the current market values of their investments. 
A) Provide managers with detailed information tailored to the managers' specific information needs. 
B) Provide people outside the business organization with information about the company's financial position and operating results. 
C) Report to the Internal Revenue Service the company's taxable income. 
D) Indicate to investors in a particular company the current market values of their investments.

Question 5

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 6

Management accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers outside the business organization.

Accepted Answer

A) True 
 B)False

Question 7

The general purpose financial statements prepared annually by a corporation would not include the:

Accepted Answer

A) Balance sheet. 
B) Income tax return. 
C) Income statement. 
D) Statement of cash flows. 
A) Balance sheet. 
B) Income tax return. 
C) Income statement. 
D) Statement of cash flows.

Question 8

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 9

The Securities and Exchange Commission is instrumental in the development of financial accounting standards.

Accepted Answer

A) True 
 B)False

Question 10

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.

Question 11

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 12

All of the following are characteristics of management accounting,except:

Accepted Answer

A) Reports are used primarily by insiders rather than by persons outside of the business entity. 
B) Its purpose is to assist managers in planning and controlling business operations. 
C) Information must be developed in conformity with generally accepted accounting principles or with income tax regulations. 
D) Information may be tailored to assist in specific managerial decisions. 
A) Reports are used primarily by insiders rather than by persons outside of the business entity. 
B) Its purpose is to assist managers in planning and controlling business operations. 
C) Information must be developed in conformity with generally accepted accounting principles or with income tax regulations. 
D) Information may be tailored to assist in specific managerial decisions.

Question 13

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 14

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 15

The basic purpose of audited financial statements is to:

Accepted Answer

A) Provide the reporting company with assurance that all assets are protected from theft or embezzlement. 
B) Prepare financial statements for companies that do not have their own accounting departments. 
C) Provide users of the financial statements with assurance that the statements are verifiable and are presented in conformity with generally accepted accounting principles. 
D) Provide both the reporting company and the users of the statements with a written guarantee that the statements are error-free. 
A) Provide the reporting company with assurance that all assets are protected from theft or embezzlement. 
B) Prepare financial statements for companies that do not have their own accounting departments. 
C) Provide users of the financial statements with assurance that the statements are verifiable and are presented in conformity with generally accepted accounting principles. 
D) Provide both the reporting company and the users of the statements with a written guarantee that the statements are error-free.

Question 16

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 e

Question 17

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 18

Which of the following is not a user of internal accounting information?

Accepted Answer

A) Store manager 
B) Chief executive officer 
C) Creditor 
D) Chief financial officer 
A) Store manager 
B) Chief executive officer 
C) Creditor 
D) Chief financial officer

Question 19

Generally accepted accounting principles:

Accepted Answer

A) Are based on official decrees only. 
B) Are based on tradition only. 
C) Are based on an accountant's experience only. 
D) May change over time. 
A) Are based on official decrees only. 
B) Are based on tradition only. 
C) Are based on an accountant's experience only. 
D) May change over time.

Question 20

Return on investment is the same as return of investment.

Accepted Answer

A) True 
 B)False

Exam 1: Accounting: Information for Decision Making

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

The best definition of an accounting system is:

The body created by the Sarbanes Oxley Act and charged with oversight of the accounting profession is the:

Financial statements are designed primarily to:

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

Management accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers outside the business organization.

The general purpose financial statements prepared annually by a corporation would not include the:

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

The Securities and Exchange Commission is instrumental in the development of financial accounting standards.

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

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.

All of the following are characteristics of management accounting,except:

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

The basic purpose of audited financial statements is to:

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.

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

Which of the following is not a user of internal accounting information?

Generally accepted accounting principles:

Return on investment is the same as return of investment.

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

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters