|
Accounting | Business | Computer
Science | General
Studies | Math | Sciences | Civics Exam | Help/Support | Join/Cancel | Contact Us | Login/Log Out
Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project Office Accounting: Exam Chapter 1 General Questions & Answers
The purpose of accounting is to provide financial information about an economic or social
entity.
True False An accounting system is designed to accumulate and classify data about a company's financial activities and summarize them in the general journal. True False In a sole proprietorship, the owner is NOT responsible for the debts of the business if the company is unable to pay. True False Laws passed by Congress in 1933 and 1934 gave the Securities and Exchange Commission (SEC) final say on matters of financial reporting by publicly owned corporations. True False Currently, generally accepted accounting principles are developed by the American Institute of Certified Public Accountants (AICPA). True False The Securities and Exchange Commission (SEC) requires that publicly owned corporations submit financial statements to it at least one time each year. True False Public accounting firms provide three major types of services: auditing, tax accounting, and management advisory services. True False The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations. True False Anyone can invest in a closely held corporation. True False Managerial Accounting is any activity associated with the preparation of tax returns and the audit of those returns. True False The separate entity assumption applies only to the corporate form of business. True False As the first step in the development of generally accepted accounting principles, the FASB writes a discussion memorandum, which explains the topic being considered. True False Public accountants work on the staff of federal, state, or local governmental units. True False The SEC uses financial information to determine a company's tax base. True False When a partner leaves the company, the partnership is dissolved and a new partnership may be formed with the remaining partners. True False Accounting is defined as the process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties. True False The owners and managers of a business are the only users of the financial information. True False Most owners and managers rely heavily on the accountant's judgment and knowledge when making financial decisions. True False Accountants provide financial information to various parties so they can make business decisions. True False When a business is organized as a sole proprietorship, the owner should combine his/her personal financial information with the business financial information. True False A business partnership consists of two or more owners. True False Which of the following is NOT an area in which accountants usually practice? A) Managerial (Private) Accounting B) Public Accounting C) Industrial Accounting D) Governmental Accounting Identify which of the following are considered OUTSIDE users of financial accounting information. A) managers B) banks C) employees D) owners Answer: B An example of an economic entity is A) a business. B) a town. C) a church. D) D) a politician. Answer: A The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the A) sole proprietorship. B) nonprofit organization. C) corporation. D) partnership. Which of the following is NOT a type of information communicated by the financial statements? A) the types of products and services the business provides B) the equity, or value, of the business C) the amount of revenue earned by the business D) the amount spent on costs (expenses) of the business Answer: A The Financial Accounting Standards Board is responsible for A) auditing financial statements. B) making recommendations to the Securities and Exchange Commission. C) developing generally accepted accounting principles. D) establishing accounting systems for businesses. Answer: C The government agency that has final authority over the financial reporting of publicly owned corporations is the A) Financial Accounting Standards Board. B) Internal Revenue Service. C) Federal Trade Commission. D) Securities and Exchange Commission. The financial activities of a business and the financial activities of the owners should be A) combined only if the owner wants them to be. B) kept totally and completely separate. C) combined in the firm's accounting records. D) reported in different parts of the firm's accounting records. All financial statements submitted to the SEC by publicly owned corporations must include an auditor's report prepared by A) an internal auditor. B) an independent certified public accountant. C) the firm's managerial accountant. D) anyone in the accounting department. The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as: A) managerial accounting. B) cost accounting. C) financial accounting. D) auditing. The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as A) publicly owned corporations. B) sole proprietorships. C) closely held corporations. D) privately owned corporations. Answer: A Owners are not personally responsible for the debts of the business if the form of business organization is a A) partnership. B) nonprofit organization. C) corporation. D) sole proprietorship. Identify the form of business that is considered a separate legal entity. A) a sole proprietorship B) a partnership C) a limited liability partnership D) a corporation A company issues periodic reports called A) audits. B) financial statements. C) tax returns. D) summaries. Which of the following is NOT part of the process of accounting for financial information? A) classifying B) communicating C) identifying D) recording Which of the following is a true statement in regards to the International Accounting Standards Board? A) The IASB develops all accounting principles to be used in the United States B) The IASB has the authority to audit financial statements of all US corporations C) The IASB deals with issues caused by the lack of uniform accounting principles existing in different countries D) The IASB was created by the American Accounting Association Which of the following is NOT a service of public accounting firms? A) management advisory services B) tax accounting C) investment services D) auditing Tax accounting involves tax compliance and A) tax planning. B) tax configuration. C) tax evaluation. D) tax obfuscation. Tax planning includes A) suggesting actions to reduce tax liability. B) preparing tax returns. C) correcting tax returns. D) auditing tax returns. Managerial accounting is A) government accounting. B) private accounting. C) tax accounting. D) public accounting. Answer: B Explanation: The following are all government agencies except the A) IRS. B) FBI. C) SEC. D) AICPA. An act passed in response to the wave of corporate accounting scandals is the A) Sorbine-Oxide Act. B) Sardonic-Oxone Act. C) Saxon-Ordanly Act. D) Sarbanes-Oxley Act. Owners and managers need financial information in order to A) grant loans. B) collect taxes. C) make decisions. D) issue credit. The Sarbanes-Oxley Act includes rules on A) auditor rotation. B) auditor reporting. C) auditor retention. D) auditor reliability. A form of the partnerships business entity is DBA. B) LLC. C) LLP. D) INP. Which statement below represents what GAAP stands for? A) Generally Approved Accounting Practices. B) General Accepted Accounting Principles. C) Generally Anticipated Accounting Principles. D) Generally Accepted Accounting Policies The review of financial statements to assess their fairness and adherence to GAAP is A) compliance. B) preparation. C) auditing. D) accounting. Management advisory services are designed to help employers. B) government agencies. C) clients. D) creditors. An independent accountant who is licensed by the state and provides accounting services to the public for a fee is a A) CMA. B) CIA. C) CFE. D) CPA The Financial Accounting Standards Board has the authority to develop generally accepted accounting principles. Choose the option below that contains the steps used by the FASB in developing GAAP. A) steps include: publishing a notice in the newspaper, seeking public opinion, and issuing a statement of principle. B) steps include: issuing a discussion memorandum, filing a legal draft, and notifying the SEC. C) steps include: issuing a discussion memorandum, issuing an exposure draft, and issuing a statement of principle. D) steps include: filing a complaint with the SEC, issuing an internal report, and issuing a statement of principle. SHORT ANSWER QUESTIONS Accounting is often referred to as the language of ________. Business The results of the accounting process are summarized in periodic reports called ________. financial statements Users of financial information, such as owners, managers and employees, are referred to as ________ users. inside or internal The three major legal forms of business entity are the sole proprietorship, the partnership, and the ________. corporation A partnership has ________ owners. two or more Ownership in a corporation is evidenced by shares of ________. stock The Securities and Exchange Commission (SEC) regulates the accounting methods and financial reporting of ________ owned corporations. Publicly The financial statements submitted to the SEC by a corporation must be ________ by an independent accountant to ensure their fairness and adherence to generally accepted accounting principles. audited Accountants normally choose to practice in one of three areas: public accounting, managerial accounting, or ________ accounting. governmental A form of business entity owned by one person is called a(n) ________. sole proprietorship Which of the following accounts may appear on a post-closing trial balance? Cash, Salaries Payable, and Retained Earnings Which of the following steps of the accounting cycle is not completed at the end of the period? Journalize transactions as they occur Accounting is the information system that Measures business activities, communicates the results to the decision makers, and processes information into reports Assets and liabilities are listed on the balance sheet in the order of their Liquidity Which of the following is not an external user of a business's financial information? Employee Generally Accepted Accounting Principles (GAAP) are currently formulated by the Financial Accounting Standards Board (FASB) Which type of business organization is owned by only one owner? Sole proprietorship Which of the following accounts would be included in the plant assets category of the classified balance sheet? Accumulated Depreciation Which situation indicates a net loss within the Income Statement section of the worksheet? Total debits exceed total credits Which of the following accounts is not closed? Accumulated Depreciation What do closing entries accomplish? Zero out the revenues, expenses, and dividends, transfer revenues, expenses, and dividends to the Retained Earning account Bring the Retained Earnings account to its correct ending balance Which of the following statements concerning reversing entries is true? Revising entries are most often used with accrual-type adjustments Which of the following characteristics best describes a corporation? Stockholders not personally liable for entities debts Which of the following requires accounting information to be complete, neutral, and free from material error? Faithful representation concept The balance sheet reports the Financial position on a specific date The detailed record of the changes in a particular asset, liabilities, or stockholders equity is called An account Which of the following accounts is a liability? Unearned Revenue The left side of an account is used to record which of the following? Debits Which of the following statements is correct? Accounts Payable is increased with a credit Pixel Copies recorded a cash collection on account by debiting Cash and crediting Accounts Payable. What will the trial balance show for this error? Liabilities are overstated The adjusted trail balance shows Account balance after adjustments A & D Window leaning preformed $450 of services but has not yet billed customers for the month. If A & D fails to record the adjusting entry, what is the impact on the financial statements? Balance sheet: assets understated, equity understated income statement, revenues understated A worksheet: Is an internal document that helps summarize data for the preparation of financial statements Which sequence correctly summarizes the accounting process? Journalize transactions, post to the accounts, prepare a trial balance Which of the following is true of accrual basis accounting and cash basis accounting? Accural accounting records revenue only when its earned The revenue recognition principle requires Revenue to be recorded only after the business has earned it Adjusting the accounts is the process of Updating the accounts at the end of a period Which of the following is an example of a prepaid adjusting entry? Recording usage of office supplies during the period Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project
|
| Home |
Accounting & Finance | Business |
Computer Science | General Studies | Math | Sciences |
Civics Exam |
Everything
Else |
Help & Support |
Join/Cancel |
Contact Us |
Login / Log Out |