Question 1

What does the success of the AICPA code depend on?

Accepted Answer

A)  Understanding of the code by its users 
B)  The exercising of moral judgement in all things 
C)  The acceptance and use by the professionals governed by the code 
D)  Lack of misleading statements that destroys public confidence in the accounting profession 
E)  Supporting the public interest in accounting practices 
A)  Understanding of the code by its users 
B)  The exercising of moral judgement in all things 
C)  The acceptance and use by the professionals governed by the code 
D)  Lack of misleading statements that destroys public confidence in the accounting profession 
E)  Supporting the public interest in accounting practices

Question 2

Why is a company's owners' equity important for investors and lenders?

Accepted Answer

A)  Owners' equity indicates potential profit. 
B)  Owners' equity determines how quickly liabilities will increase. 
C)  Owners' equity determines how much will be paid out as dividends. 
D)  Owners' equity indicates how much the owner has invested in the company 
E)  Owners' equity indicates the level of security. 
A)  Owners' equity indicates potential profit. 
B)  Owners' equity determines how quickly liabilities will increase. 
C)  Owners' equity determines how much will be paid out as dividends. 
D)  Owners' equity indicates how much the owner has invested in the company 
E)  Owners' equity indicates the level of security.

Question 3

Why is ethics in accounting practices important?

Accepted Answer

A)  So stakeholders can seek higher return on their investment 
B)  Accounting methods depend on the veracity of their application. 
C)  To ensure consistency between firms 
D)  To allow for uniformity in CPA standards and application 
E)  To allow multinational firms to understand international investment 
A)  So stakeholders can seek higher return on their investment 
B)  Accounting methods depend on the veracity of their application. 
C)  To ensure consistency between firms 
D)  To allow for uniformity in CPA standards and application 
E)  To allow multinational firms to understand international investment

Question 4

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 5

In which accounting standard did the FASB and the IASB jointly propose new standards designed to improve the comparability of disclosures in financial statements?

Accepted Answer

A)  In devaluing financial assets 
B)  In revenue recognition 
C)  In valuing assets 
D)  In expected loss modeling 
E)  In fair value discloser 
A)  In devaluing financial assets 
B)  In revenue recognition 
C)  In valuing assets 
D)  In expected loss modeling 
E)  In fair value discloser

Question 6

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

Accepted Answer

A)  Asset 
B)  Owners' equity 
C)  Inventory 
D)  Liability 
E)  Credit 
A)  Asset 
B)  Owners' equity 
C)  Inventory 
D)  Liability 
E)  Credit

Question 7

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Accepted Answer

A)  National bookkeeping standards 
B)  Core competencies for accounting 
C)  Accounting and financial rules 
D)  National guidelines of accounting principles 
E)  Generally accepted accounting principles 
A)  National bookkeeping standards 
B)  Core competencies for accounting 
C)  Accounting and financial rules 
D)  National guidelines of accounting principles 
E)  Generally accepted accounting principles

Question 8

Which of the following terms refers to the examination of a company's accounting system to determine whether its financial reports fairly represent its operations?

Accepted Answer

A)  Company-wide analysis 
B)  Forensic accounting 
C)  Portfolio analysis 
D)  Audit 
E)  Preliminary investigation 
A)  Company-wide analysis 
B)  Forensic accounting 
C)  Portfolio analysis 
D)  Audit 
E)  Preliminary investigation

Question 9

Major projects, such as corporate mergers or buyouts, can adversely affect the long-term solvency ratio of a company.

Accepted Answer

A) True 
 B)False

Question 10

When might high debt levels be a benefit to an organization?

Accepted Answer

A)  When trying to make otherwise unaffordable investments 
B)  When trying to prevent a leveraged buyout 
C)  When determining earnings per share on common stock 
D)  When calculating the current ratio to determine short-term solvency 
E)  When the firm's short run credit risk is strong 
A)  When trying to make otherwise unaffordable investments 
B)  When trying to prevent a leveraged buyout 
C)  When determining earnings per share on common stock 
D)  When calculating the current ratio to determine short-term solvency 
E)  When the firm's short run credit risk is strong

Question 11

Which of the following describes a liability?

Accepted Answer

A)  The potential profit from selling a firm's assets and settling all of its debts 
B)  A debt owed by a firm to an outside organization or individual 
C)  Any economic resource expected to benefit a firm or an individual who owns it 
D)  Any economic deficit expected to cost a firm or an individual who owns it 
E)  The amount of money originally invested in a business by its owners 
A)  The potential profit from selling a firm's assets and settling all of its debts 
B)  A debt owed by a firm to an outside organization or individual 
C)  Any economic resource expected to benefit a firm or an individual who owns it 
D)  Any economic deficit expected to cost a firm or an individual who owns it 
E)  The amount of money originally invested in a business by its owners

Question 12

Ethical behavior requires that a CPA give precedence to public trust in the profession over the directions of her or his employer.

Accepted Answer

A) True 
 B)False

Question 13

Discuss the principle known as full disclosure.

Accepted Answer

To help users better understand the numb

Question 14

Which of the following bodies formulates the generally accepted accounting principles (GAAP)?

Accepted Answer

A)  Accounting Disclosure Board 
B)  Financial Accounting Standards Board 
C)  Association of Certified Fraud Examiners 
D)  Securities and Exchange Commission 
E)  American Institute of Certified Public Accountants 
A)  Accounting Disclosure Board 
B)  Financial Accounting Standards Board 
C)  Association of Certified Fraud Examiners 
D)  Securities and Exchange Commission 
E)  American Institute of Certified Public Accountants

Question 15

Which of the following terms refers to the amount paid for an existing business beyond the value of its other assets?

Accepted Answer

A)  Goodwill 
B)  Excess compensation 
C)  Licensing 
D)  Asset promotion 
E)  Liability deduction 
A)  Goodwill 
B)  Excess compensation 
C)  Licensing 
D)  Asset promotion 
E)  Liability deduction

Question 16

Which of the following terms refers to the comprehensive system for collecting, analyzing, and communicating financial information?

Accepted Answer

A)  Bookkeeping 
B)  Accounting 
C)  Controlling 
D)  Auditing 
E)  Budgeting 
A)  Bookkeeping 
B)  Accounting 
C)  Controlling 
D)  Auditing 
E)  Budgeting

Question 17

Which of the following requires managers to share information about events inside the company and explain certain transaction?

Accepted Answer

A)  Earning cycle reports 
B)  Revenue recognition 
C)  Statement of cash flow 
D)  Solvency ratios 
E)  Full disclosure 
A)  Earning cycle reports 
B)  Revenue recognition 
C)  Statement of cash flow 
D)  Solvency ratios 
E)  Full disclosure

Question 18

Which of the following best describes the revenues of an organization?

Accepted Answer

A)  Gross profit compared to operating expenses 
B)  Value of revenues compared to cost of revenues 
C)  Yearly receipts and cash payments 
D)  Cost of obtaining materials needed to produce products 
E)  Funds that flow into the business from the sale of the goods or services provided 
A)  Gross profit compared to operating expenses 
B)  Value of revenues compared to cost of revenues 
C)  Yearly receipts and cash payments 
D)  Cost of obtaining materials needed to produce products 
E)  Funds that flow into the business from the sale of the goods or services provided

Question 19

The International Accounting Standards Board is the prominent international organization for global accounting standards.

Accepted Answer

A) True 
 B)False

Question 20

Discuss earnings per share and how they are used.

Accepted Answer

Defined as net income divided by the num

What does the success of the AICPA code depend on?

Why is a company's owners' equity important for investors and lenders?

Why is ethics in accounting practices important?

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

In which accounting standard did the FASB and the IASB jointly propose new standards designed to improve the comparability of disclosures in financial statements?

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Which of the following terms refers to the examination of a company's accounting system to determine whether its financial reports fairly represent its operations?

Major projects, such as corporate mergers or buyouts, can adversely affect the long-term solvency ratio of a company.

When might high debt levels be a benefit to an organization?

Which of the following describes a liability?

Ethical behavior requires that a CPA give precedence to public trust in the profession over the directions of her or his employer.

Discuss the principle known as full disclosure.

Which of the following bodies formulates the generally accepted accounting principles (GAAP)?

Which of the following terms refers to the amount paid for an existing business beyond the value of its other assets?

Which of the following terms refers to the comprehensive system for collecting, analyzing, and communicating financial information?

Which of the following requires managers to share information about events inside the company and explain certain transaction?

Which of the following best describes the revenues of an organization?

The International Accounting Standards Board is the prominent international organization for global accounting standards.

Discuss earnings per share and how they are used.

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

Understanding Money and the Role of Banking

Managing Business Finances

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Exam 15: The Role of Accountants and Accounting Information

What does the success of the AICPA code depend on?

Why is a company's owners' equity important for investors and lenders?

Why is ethics in accounting practices important?

An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.

In which accounting standard did the FASB and the IASB jointly propose new standards designed to improve the comparability of disclosures in financial statements?

Which of the following terms refers to the amount of money that owners would receive if they sold all of a company's assets and paid all of its liabilities?

Which of the following refers to the rules and procedures governing the content and form of financial reports?

Which of the following terms refers to the examination of a company's accounting system to determine whether its financial reports fairly represent its operations?

Major projects, such as corporate mergers or buyouts, can adversely affect the long-term solvency ratio of a company.

When might high debt levels be a benefit to an organization?

Which of the following describes a liability?

Ethical behavior requires that a CPA give precedence to public trust in the profession over the directions of her or his employer.

Discuss the principle known as full disclosure.

Which of the following bodies formulates the generally accepted accounting principles (GAAP)?

Which of the following terms refers to the amount paid for an existing business beyond the value of its other assets?

Which of the following terms refers to the comprehensive system for collecting, analyzing, and communicating financial information?

Which of the following requires managers to share information about events inside the company and explain certain transaction?

Which of the following best describes the revenues of an organization?

The International Accounting Standards Board is the prominent international organization for global accounting standards.

Discuss earnings per share and how they are used.

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

Understanding Money and the Role of Banking

Managing Business Finances

Filters