Question 1

Government agencies, such as the Securities and Exchange Commission (SEC), are typically audited by public accountants.

Accepted Answer

A) True 
 B)False

Question 2

Out­of­pocket costs involve the loss of _____.

Accepted Answer

A)  manpower 
B)  money 
C)  opportunities 
D)  infrastructure 
A)  manpower 
B)  money 
C)  opportunities 
D)  infrastructure

Question 3

Priya was recently hired by RLM Inc. In her role as an accountant, she prepares reports and analyzes financial information related to the company. In this case, Priya is an example of a _____ accountant.

Accepted Answer

A)  government 
B)  forensic 
C)  management 
D)  public 
A)  government 
B)  forensic 
C)  management 
D)  public

Question 4

In activity­based costing, product costs are assigned based on links between activities that drive costs and the production of specific products.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true of CPA firms?

Accepted Answer

A)  ​They can only audit companies that are solely in the private sector. 
B)  ​They have strong associations with the companies they are auditing. 
C)  ​They are not authorized to audit publicly traded companies. 
D)  ​They must be independent of the companies they are auditing. 
A)  ​They can only audit companies that are solely in the private sector. 
B)  ​They have strong associations with the companies they are auditing. 
C)  ​They are not authorized to audit publicly traded companies. 
D)  ​They must be independent of the companies they are auditing.

Question 6

In the context of an auditor's report, an unqualified opinion and a clean opinion are the same thing.

Accepted Answer

A) True 
 B)False

Question 7

Government accountants provide services such as external auditing and management consulting to clients on a fee basis.

Accepted Answer

A) True 
 B)False

Question 8

The accounting equation is _____.

Accepted Answer

A)  Assets = Liabilities ­ Owner's Equity 
B)  Liabilities = Assets + Revenue 
C)  Assets = Liabilities + Owner's Equity 
D)  Assets = Liabilities + Net Income 
A)  Assets = Liabilities ­ Owner's Equity 
B)  Liabilities = Assets + Revenue 
C)  Assets = Liabilities + Owner's Equity 
D)  Assets = Liabilities + Net Income

Question 9

According to the accounting equation, Assets ­ Expenses = Net Income.

Accepted Answer

A) True 
 B)False

Question 10

Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the:

Accepted Answer

A)  preparation of financial statements. 
B)  preparation of a company's tax returns. 
C)  audit of a company's financial books. 
D)  preparation of organizational budgets. 
A)  preparation of financial statements. 
B)  preparation of a company's tax returns. 
C)  audit of a company's financial books. 
D)  preparation of organizational budgets.

Question 11

In a statement of cash flows, cash from _____ show the amount of cash that flows into a company from the sale of goods and services.

Accepted Answer

A)  auxilliary activities 
B)  financing activities 
C)  investing activities 
D)  operating activities 
A)  auxilliary activities 
B)  financing activities 
C)  investing activities 
D)  operating activities

Question 12

The Financial Accounting Standards Board comprises ten members, with each member serving a three­year term.

Accepted Answer

A) True 
 B)False

Question 13

Internal auditors are private accountants responsible for verifying another company's internal accounting procedures.

Accepted Answer

A) True 
 B)False

Question 14

Many accountants become certified fraud examiners due to the less rigorous requirements of becoming a certified public accountant.

Accepted Answer

A) True 
 B)False

Question 15

Explain the Sarbanes­Oxley Act of 2002. How does it refer to accounting practices? Provide some history as to why this act became necessary.

Accepted Answer

The Sarbanes­Oxley Act of 2002 is a law

Question 16

The accounting equation shows us that the value of a firm's assets must equal the:

Accepted Answer

A)  value of the firm's earnings at any specific point in time. 
B)  value of the firm's revenues minus expenses. 
C)  amount of owners' equity. 
D)  amount of financing provided by owners and creditors. 
A)  value of the firm's earnings at any specific point in time. 
B)  value of the firm's revenues minus expenses. 
C)  amount of owners' equity. 
D)  amount of financing provided by owners and creditors.

Question 17

Comparative balance sheets show whether a firm's net income increased or decreased with any changes in the revenues and expenses over recent years.

Accepted Answer

A) True 
 B)False

Question 18

The stockholders' equity statement can show how net income and dividends affect retained earnings.

Accepted Answer

A) True 
 B)False

Question 19

Managerial accounting primarily serves the needs of a firm's:

Accepted Answer

A)  internal stakeholders. 
B)  creditors. 
C)  government regulators. 
D)  external auditors. 
A)  internal stakeholders. 
B)  creditors. 
C)  government regulators. 
D)  external auditors.

Question 20

Which of the following best defines cost?

Accepted Answer

A)  Anything of value that a firm has at its disposal 
B)  The value of a received item in a monetary exchange 
C)  The value of expense inflows in an organization 
D)  The value of what is given up in exchange for something else 
A)  Anything of value that a firm has at its disposal 
B)  The value of a received item in a monetary exchange 
C)  The value of expense inflows in an organization 
D)  The value of what is given up in exchange for something else

Government agencies, such as the Securities and Exchange Commission (SEC), are typically audited by public accountants.

Outofpocket costs involve the loss of _____.

Priya was recently hired by RLM Inc. In her role as an accountant, she prepares reports and analyzes financial information related to the company. In this case, Priya is an example of a _____ accountant.

In activitybased costing, product costs are assigned based on links between activities that drive costs and the production of specific products.

Which of the following statements is true of CPA firms?

In the context of an auditor's report, an unqualified opinion and a clean opinion are the same thing.

Government accountants provide services such as external auditing and management consulting to clients on a fee basis.

The accounting equation is _____.

According to the accounting equation, Assets Expenses = Net Income.

Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the:

In a statement of cash flows, cash from _____ show the amount of cash that flows into a company from the sale of goods and services.

The Financial Accounting Standards Board comprises ten members, with each member serving a threeyear term.

Internal auditors are private accountants responsible for verifying another company's internal accounting procedures.

Many accountants become certified fraud examiners due to the less rigorous requirements of becoming a certified public accountant.

Explain the SarbanesOxley Act of 2002. How does it refer to accounting practices? Provide some history as to why this act became necessary.

The accounting equation shows us that the value of a firm's assets must equal the:

Comparative balance sheets show whether a firm's net income increased or decreased with any changes in the revenues and expenses over recent years.

The stockholders' equity statement can show how net income and dividends affect retained earnings.

Managerial accounting primarily serves the needs of a firm's:

Which of the following best defines cost?

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Appendix Studentinstructor Review Cards

Online Appendix

Filters

Exam 8: Accounting: Decision Making by the Numbers

Government agencies, such as the Securities and Exchange Commission (SEC), are typically audited by public accountants.

Out­of­pocket costs involve the loss of _____.

Priya was recently hired by RLM Inc. In her role as an accountant, she prepares reports and analyzes financial information related to the company. In this case, Priya is an example of a _____ accountant.

In activity­based costing, product costs are assigned based on links between activities that drive costs and the production of specific products.

Which of the following statements is true of CPA firms?

In the context of an auditor's report, an unqualified opinion and a clean opinion are the same thing.

Government accountants provide services such as external auditing and management consulting to clients on a fee basis.

The accounting equation is _____.

According to the accounting equation, Assets ­ Expenses = Net Income.

Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the:

In a statement of cash flows, cash from _____ show the amount of cash that flows into a company from the sale of goods and services.

The Financial Accounting Standards Board comprises ten members, with each member serving a three­year term.

Internal auditors are private accountants responsible for verifying another company's internal accounting procedures.

Many accountants become certified fraud examiners due to the less rigorous requirements of becoming a certified public accountant.

Explain the Sarbanes­Oxley Act of 2002. How does it refer to accounting practices? Provide some history as to why this act became necessary.

The accounting equation shows us that the value of a firm's assets must equal the:

Comparative balance sheets show whether a firm's net income increased or decreased with any changes in the revenues and expenses over recent years.

The stockholders' equity statement can show how net income and dividends affect retained earnings.

Managerial accounting primarily serves the needs of a firm's:

Which of the following best defines cost?

Business Now: Change Is the Only Constant

Economics: the Framework of Business

The World Marketplace: Business Without Borders

Business Ethics Social Responsibility: Doing Well by Doing Good

Business Communication: Creating Delivering Messages That Matter

Business Formation: Choosing the Form That Fits

Small Business Entrepreneurship: Economic Rocket Fuel

Finance: Acquiring Using Funds to Maximize Value

Securities Markets: Trading Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

HRM: Building a Top Quality Workforce

Managing Information Technology: Finding New Ways to Learn and Link

Om: Putting It All Together Endnotes

Appendix Studentinstructor Review Cards

Online Appendix

Filters

Outofpocket costs involve the loss of _____.

In activitybased costing, product costs are assigned based on links between activities that drive costs and the production of specific products.

According to the accounting equation, Assets Expenses = Net Income.

The Financial Accounting Standards Board comprises ten members, with each member serving a threeyear term.

Explain the SarbanesOxley Act of 2002. How does it refer to accounting practices? Provide some history as to why this act became necessary.