Question 1

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 $7,000 to help get the company started, and have promised to repay your $7,000 plus 10% interest in one year. Of the following, which amount may be described as the return on your investment?

Accepted Answer

A)   $7,000.
B)   $700.
C)   $7,700.
D)   Some other amount.

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, 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.Learning Objective: 01-02 Discuss the significance of accounting systems in generating reliable accounting information and understand the five components of internal control.

Question 3

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.

Question 4

Which of the following would not be considered a user of financial information?

Accepted Answer

A)   A large pension fund
B)   A real estate investor
C)   Company management
D)   All the above are considered interested in financial information.

Question 5

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 referred to as:

Accepted Answer

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

Question 6

Today the most authoritative source of generally accepted accounting principles is the American Accounting Association.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not

Accepted Answer

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

Question 8

Which of the following is not recognized as a source of generally accepted accounting principles?

Accepted Answer

A)   Widespread and long-term use of a particular practice.
B)   The Financial Accounting Standards Board (FAS
B)  .
C)   The American Institute of Certified Public Accountants (AICP
A)  .
D)   None of the above. Generally accepted accounting principles may arise from each of these sources.

Question 9

Establishing international accounting standards is the responsibility of

Accepted Answer

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

Question 10

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 princ...

Question 11

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)   Tax authorities.
B)   Institute of Management Accountants.
C)   Financial Accounting Standards Board.
D)   New York Stock Exchange.

Question 12

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)   All three of the above are for a period of time rather than at a specific date.

Question 13

Match between columns
                        Premises: Financial Accounting Standards Board
Securities and Exchange Commission
American Accounting Association
Institute of Internal Auditors
American Institute of CPAs
Institute of Management Accountants

Accepted Answer

The Answer of Government agency that regulates financial reporting by is...

Question 14

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

Accepted Answer

Balance sheet (State...

Question 15

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

Question 16

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.

Question 17

The field of accounting may best be described as:

Accepted Answer

A)   Recording the financial transactions of an economic entity.
B)   Developing information in conformity with generally accepted accounting principles.
C)   The art of interpreting, measuring, and describing economic activity.
D)   Developing the information required for the preparation of income tax returns.

Question 18

To increase its usefulness to investors and creditors, the information is usually accompanied by explanations from management.

Accepted Answer

The answer of To increase its usefulness to investors and...

Question 19

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.

Question 20

Management accountants primarily are concerned with developing information:

Accepted Answer

A)   For use in income tax returns.
B)   Suited to the needs of shareholders, creditors, and other external decision makers.
C)   In conformity with generally accepted accounting principles.
D)   Suited to the needs of decision makers within the organization.

Exam 1: Accounting: Information for Decision Making

Which of the following would not be considered a user of financial information?

Correct Answer
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Correct Answer
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Today the most authoritative source of generally accepted accounting principles is the American Accounting Association.

Correct Answer
verified

Which of the following is not recognized as a source of generally accepted accounting principles?

Correct Answer
verified

The field of accounting may best be described as:

Correct Answer
verified

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

Correct Answer
verified

Establishing international accounting standards is the responsibility of

Correct Answer
verified

The basic purpose of bookkeeping is to:

Correct Answer
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The best definition of an accounting system is:

Correct Answer
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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 referred to as:

Correct Answer
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Information is cost effective when:

Correct Answer
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Correct Answer
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Which financial statement is prepared as of a specific date?

Correct Answer
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Which of the following is not

A) Store manager.
B) Chief executive officer.
C) Creditor.
D) Chief financial officer.
Correct Answer
verified

Correct Answer
verified

To increase its usefulness to investors and creditors, the information is usually accompanied by explanations from management.

Correct Answer
verified

Management accountants primarily are concerned with developing information:

Correct Answer
verified

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

Correct Answer
verified
Balance sheet (State...
View Answer

The best definition of an accounting system is:

Correct Answer
verified

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.

Correct Answer
verified
(A.) Generally accepted accounting princ...
View Answer

Match the organizations with the descriptions . Each description should be used only once

Exam 1: Accounting: Information for Decision Making

Which of the following would not be considered a user of financial information?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Today the most authoritative source of generally accepted accounting principles is the American Accounting Association.

Correct AnswerverifiedShow Answer

Which of the following is not recognized as a source of generally accepted accounting principles?

Correct AnswerverifiedShow Answer

The field of accounting may best be described as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Establishing international accounting standards is the responsibility of

Correct AnswerverifiedShow Answer

The basic purpose of bookkeeping is to:

Correct AnswerverifiedShow Answer

The best definition of an accounting system is:

Correct AnswerverifiedShow Answer

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 referred to as:

Correct AnswerverifiedShow Answer

Information is cost effective when:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which financial statement is prepared as of a specific date?

Correct AnswerverifiedShow Answer

Which of the following is notA) Store manager.B) Chief executive officer.C) Creditor.D) Chief financial officer.Correct AnswerverifiedShow AnswerQuestion 45Short AnswerReview LaterAdd NoteReview Later

Correct AnswerverifiedShow Answer

To increase its usefulness to investors and creditors, the information is usually accompanied by explanations from management.

Correct AnswerverifiedShow Answer

Management accountants primarily are concerned with developing information:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedBalance sheet (State...View AnswerShow Answer

The best definition of an accounting system is:

Correct AnswerverifiedShow Answer

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.

Correct Answerverified(A.) Generally accepted accounting princ...View AnswerShow Answer

Match the organizations with the descriptions . Each description should be used only once

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Which of the following is not

A) Store manager.
B) Chief executive officer.
C) Creditor.
D) Chief financial officer.
Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Balance sheet (State...
View Answer

Correct Answer
verified

Correct Answer
verified
(A.) Generally accepted accounting princ...
View Answer