Question 1

Which of the following entities would not require accounting information pertaining to their economic activities?

Accepted Answer

A)   Social clubs.
B)   Not-for-profit entities.
C)   State governments.
D)  All of the above require accounting information.
E)   None of the above requires accounting information.F) A) and B)
G) A) and C)

Question 2

Over the years, the Securities and Exchange Commission (SEC)  has delegated its statutory authority to establish accounting principles for publicly traded companies in the United States to each of the following organizations except the:

Accepted Answer

A)   Committee on Accounting Procedures of the American Institute of Accountants.
B)   Accounting Principles Board (AP
B)  .
C)   Financial Accounting Standards Board (FAS
B)  .
D)  None of the above organizations were ever delegated authority by the SEC to establish accounting principles in the U.S.
E)   Each of the organizations listed in A, B, and C were at one time or another delegated authority by the SEC to establish accounting principles in the U.S.F) B) and D)
G) None of the above

Question 3

Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity?

Accepted Answer

A)   Financial accounting.
B)   Auditing-Public accounting.
C)   Managerial accounting.
D)  Income tax accounting.E) All of the above
F) A) and B)

Question 4

An unqualified auditors' opinion about an entity's financial statements:

Accepted Answer

A)   is a clean bill of health.
B)   means that all of the entity's transactions during the audited period were checked out.
C)   guarantees that the entity was not involved in or the victim of any fraudulent activities during the audited period.
D)  states that they are presented in conformance with U.S. generally accepted accounting principles.E) A) and C)
F) A) and D)

Question 5

Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information?

Accepted Answer

A)   Future profitability based on past profitability.
B)   Probability of success of a new product development.
C)   A forecast of dividends.
D)  Assessment of risk that a company may have more debt than it can repay if the economy enters a recession.E) C) and D)
F) B) and D)

Question 6

Cost accounting is a subset of which of the following?

Accepted Answer

A)   Internal auditing.
B)   Public auditing.
C)   Cost analysis.
D)  Managerial accounting.E) C) and D)
F) None of the above

Question 7

Which of the following statements about the Financial Accounting Standards Board is correct?

Accepted Answer

A)   The FASB is an agency of the Federal government.
B)   The FASB has the authority to fine a noncompliant firm.
C)   The FASB follows a due process procedure that permits input from interested parties before a standard is issued.
D)  The FASB is controlled by the American Institute of CPA's.
E)   None of the above statements is correct.F) B) and D)
G) A) and C)

Question 8

Major classifications of accounting activity would not include:

Accepted Answer

A)   financial accounting, internal auditing, public accounting.
B)   internal auditing, governmental accounting, managerial accounting.
C)   financial accounting, national accounting, cost accounting.
D)  auditing, income tax accounting, governmental accounting.E) A) and B)
F) A) and C)

Question 9

Which of the following is not an example of a decision or informed judgment that a potential employee could make from accounting information?

Accepted Answer

A)   Personnel turnover statistics (i.e., hiring and terminations) .
B)   Probability of the company's ability to make profit sharing plan contributions in the future.
C)   Assessment of the risk that the company may become bankrupt in the near future.
D)  The extent of the company's commitment to a research program.E) None of the above
F) All of the above

Question 10

Which of the following is an objective of financial reporting by business enterprises?

Accepted Answer

A)   Financial reporting should provide assurance that all liabilities of business enterprises will be paid.
B)   Financial reporting should show the timing and amount of future cash dividends to potential investors.
C)   The primary focus of financial reporting is information about the assets of the entity.
D)  Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.E) B) and C)
F) A) and D)

Question 11

Which of the following are qualified to express an auditor's opinion about an entity's financial statements?

Accepted Answer

A)   A Comptroller.
B)   A Certified Management Accountant.
C)   A Certified Internal Auditor.
D)  A Certified Public Accountant.
E)   None of the above.F) A) and E)
G) C) and E) D

Question 12

The ethical concept of independence means that an accountant employed:

Accepted Answer

A)   by a corporation cannot prepare financial statements for use by the company's bank.
B)   by one company cannot work part-time for another company.
C)   by an auditing firm cannot own any stock in the company being audited.
D)  by one company cannot accept a job with another company in the same industry.E) B) and C)
F) A) and D) C

Question 13

The authoritative financial accounting standards-setting body in the United States is presently the:

Accepted Answer

A)   Securities and Exchange Commission (SE
C)  
B)   International Accounting Standards Board (IAS
B)  
C)   Public Company Accounting Oversights Board (PCAO
B)  
D)  Financial Accounting Standards Board (FAS
B)  
E)   Accounting Principles Board (AP
B)  F) A) and D)
G) A) and C)

Question 14

The provisions of the Sarbanes-Oxley Act of 2002 had the following components:

Accepted Answer

A)   Enforce auditing.
B)   Attestation.
C)   Quality control.
D)  None of the above are provisions.
E)   A, B and C are correct.F) A) and C)
G) C) and D)

Question 15

Which of the following was not one of the reasons for the FASB's decision to undertake the Conceptual Framework project?

Accepted Answer

A)   To provide a structure or framework of financial accounting concepts.
B)   To describe concepts that will underlie guidance on future accounting practices and in due course serve as a basis for evaluating existing guidance and practices.
C)   To provide detailed, industry-specific authoritative guidance for the accounting and financial reporting of complex business transactions.
D)  To facilitate the FASB's efforts in developing accounting and reporting guidance by providing a common foundation and basic reasoning on which to consider merits of alternatives.E) A) and B)
F) B) and C)

Question 16

Which of the following is not a characteristic or limitation of the kind of information that financial reporting by business enterprises can provide?

Accepted Answer

A)   The information results in approximate, rather than exact, measures.
B)   The information largely reflects the financial effects of transactions that have already happened.
C)   The information is provided and used at a cost.
D)  All of the above are characteristics or limitations of the kind of information that financial reporting by business enterprises can provide.E) A) and C)
F) C) and D)

Question 17

The objectives of financial reporting for nonbusiness enterprises:

Accepted Answer

A)   are exactly the same as those for business enterprises.
B)   focus on providing information for resource providers, rather than investors.
C)   have more of an internal utilization rather than external reporting focus.
D)  do not give consideration to the cost of providing information.E) B) and D)
F) All of the above

Question 18

Accounting can be defined as:

Accepted Answer

A)   the process of preparing and auditing an entity's financial statements.
B)   the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgments.
C)   the process of communicating the financial results of corporate activities to investors and regulatory bodies.
D)  None of the above definitions are correct.
E)   A, B and C are correct.F) C) and E)
G) A) and B)

Question 19

Which of the following is true about the International Accounting Standards Board (IASB) ?

Accepted Answer

A)   The IASB has been working with the FASB in recent years to achieve convergence of International Financial Reporting Standards (IFRS)  and U.S. GAAP.
B)   The goal of the IASB is to develop a single set of high quality, understandable, enforceable, and globally accepted financial reporting standards based upon clearly articulated principles.
C)   The SEC has delegated full authority to the IASB to be the accounting standards setting body in the United States.
D)  All of the above are correct.
E)   Only A and B are correct.F) C) and D)
G) A) and C) E

Question 20

The ethical concept of integrity means that an individual must:

Accepted Answer

A)   sign a pledge to abide by all laws and regulations.
B)   report to a supervisor any violation of the code of conduct of her company that is observed.
C)   read, understand, and agree to follow all provisions of her employer's code of conduct.
D)  attempt to be honest and forthright in dealings and communications with others.E) B) and C)
F) A) and B)

Exam 1: Accounting-Present and Past

Which of the following entities would not require accounting information pertaining to their economic activities?

Correct AnswerverifiedShow Answer

Over the years, the Securities and Exchange Commission (SEC) has delegated its statutory authority to establish accounting principles for publicly traded companies in the United States to each of the following organizations except the:

Correct AnswerverifiedShow Answer

Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity?

Correct AnswerverifiedShow Answer

An unqualified auditors' opinion about an entity's financial statements:

Correct AnswerverifiedShow Answer

Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information?

Correct AnswerverifiedShow Answer

Cost accounting is a subset of which of the following?

Correct AnswerverifiedShow Answer

Which of the following statements about the Financial Accounting Standards Board is correct?

Correct AnswerverifiedShow Answer

Major classifications of accounting activity would not include:

Correct AnswerverifiedShow Answer

Which of the following is not an example of a decision or informed judgment that a potential employee could make from accounting information?

Correct AnswerverifiedShow Answer

Which of the following is an objective of financial reporting by business enterprises?

Correct AnswerverifiedShow Answer

Which of the following are qualified to express an auditor's opinion about an entity's financial statements?

Correct AnswerverifiedD

The ethical concept of independence means that an accountant employed:

Correct AnswerverifiedC

The authoritative financial accounting standards-setting body in the United States is presently the:

Correct AnswerverifiedShow Answer

The provisions of the Sarbanes-Oxley Act of 2002 had the following components:

Correct AnswerverifiedShow Answer

Which of the following was not one of the reasons for the FASB's decision to undertake the Conceptual Framework project?

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic or limitation of the kind of information that financial reporting by business enterprises can provide?

Correct AnswerverifiedShow Answer

The objectives of financial reporting for nonbusiness enterprises:

Correct AnswerverifiedShow Answer

Accounting can be defined as:

Correct AnswerverifiedShow Answer

Which of the following is true about the International Accounting Standards Board (IASB) ?

Correct AnswerverifiedE

The ethical concept of integrity means that an individual must:

Correct AnswerverifiedShow Answer

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D

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C

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E

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