Question 1

The Public Company Accounting Oversight Board is the governmental equivalent of the Financial Accounting Standards Board.

Accepted Answer

A) True 
 B)False

Question 2

Successful companies should generally produce the majority of their cash flow from

Accepted Answer

A)  investing activities. 
B)  financing activities. 
C)  operating activities. 
D)  stock activities. 
E)  production activities. 
A)  investing activities. 
B)  financing activities. 
C)  operating activities. 
D)  stock activities. 
E)  production activities.

Question 3

Owners of each type of the following organizations have what type of liability for debts of that organization?

Accepted Answer

The answer of Owners of each type of the following...

Question 4

Expenses can decrease assets or increase liabilities.

Accepted Answer

A) True 
 B)False

Question 5

An independent, external auditor's unqualified audit opinion indicates that no material misstatements exist within a set of financial statements.

Accepted Answer

A) True 
 B)False

Question 6

The Federal Accounting Standards Board is the primary accounting rule-making authority.

Accepted Answer

A) True 
 B)False

Question 7

The four primary financial statements included in corporate annual reports are the

Accepted Answer

A)  Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Working Capital. 
B)  Income Statement, Statement of Assets, Cash Flow Statement, and Statement of Fund Balance. 
C)  Statement of Equity, Statement of Income, Statement of Cash Flows, and Balance Sheet. 
D)  Balance Sheet, Income Statement, Statement of Stockholders' Equity, and Statement of Cash Flows. 
E)  Statement of Fund Balance, Statement of Equity, Balance Sheet, and Income Statement. 
A)  Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Working Capital. 
B)  Income Statement, Statement of Assets, Cash Flow Statement, and Statement of Fund Balance. 
C)  Statement of Equity, Statement of Income, Statement of Cash Flows, and Balance Sheet. 
D)  Balance Sheet, Income Statement, Statement of Stockholders' Equity, and Statement of Cash Flows. 
E)  Statement of Fund Balance, Statement of Equity, Balance Sheet, and Income Statement.

Question 8

Which of the following statements is false?

Accepted Answer

A)  Controllers are responsible for preparing financial statements, while external auditors are responsible for issuing opinions about financial statements. 
B)  A principal objective of an independent audit is to determine whether an entity's financial statements have been prepared in accordance with generally accepted accounting principles (GAAP). 
C)  Both internal and external auditors share the same audit objectives and degree of independence. 
D)  If a company's financial statements have been prepared in accordance with GAAP, those financial statements are presumed to fairly reflect company's financial affairs. 
E)  Independent examination of a set of financial statements increases third-party confidence in those financial statements. 
A)  Controllers are responsible for preparing financial statements, while external auditors are responsible for issuing opinions about financial statements. 
B)  A principal objective of an independent audit is to determine whether an entity's financial statements have been prepared in accordance with generally accepted accounting principles (GAAP). 
C)  Both internal and external auditors share the same audit objectives and degree of independence. 
D)  If a company's financial statements have been prepared in accordance with GAAP, those financial statements are presumed to fairly reflect company's financial affairs. 
E)  Independent examination of a set of financial statements increases third-party confidence in those financial statements.

Question 9

Footnotes to the financial statements provide crucial information that should be used by readers to make informed decisions.

Accepted Answer

A) True 
 B)False

Question 10

An accountant employed in public accounting is often a(an)

Accepted Answer

A)  controller. 
B)  cost analyst. 
C)  external auditor. 
D)  financial analyst. 
E)  internal auditor. 
A)  controller. 
B)  cost analyst. 
C)  external auditor. 
D)  financial analyst. 
E)  internal auditor.

Question 11

The form and content of financial statements are specified by generally accepted auditing principles.

Accepted Answer

A) True 
 B)False

Question 12

The most common reason for an audit to uncover financial statement errors is management fraud.

Accepted Answer

A) True 
 B)False

Question 13

The balance sheet equation for a corporation can be expressed as assets - liabilities = stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 14

The primary function of accounting is to provide

Accepted Answer

A)  quantitative information about the transactions of a business so that investors can determine future profitability. 
B)  financial information about a business so determine the proper amount of taxes to be paid by a business. 
C)  financial information about a business so that users can make economic decisions. 
D)  qualitative and quantitative information about a business so that users can predict future stock prices. 
E)  information about the assets of a business so that users know the worth of a business enterprise. 
A)  quantitative information about the transactions of a business so that investors can determine future profitability. 
B)  financial information about a business so determine the proper amount of taxes to be paid by a business. 
C)  financial information about a business so that users can make economic decisions. 
D)  qualitative and quantitative information about a business so that users can predict future stock prices. 
E)  information about the assets of a business so that users know the worth of a business enterprise.

Question 15

At March 31, 2010, Gaffer's Department Store, had $1,000,000 of assets and $325,000 of liabilities. On April 10, 2010, Gaffer's paid off $125,000 of its liabilities. Total stockholders' equity at April 10, 2010, after the payment, is

Accepted Answer

A)  $ 550,000. 
B)  $ 600,000. 
C)  $ 675,000. 
D)  $1,000,000. 
E)  $1,125,000. 
A)  $ 550,000. 
B)  $ 600,000. 
C)  $ 675,000. 
D)  $1,000,000. 
E)  $1,125,000.

Question 16

Wholesalers typically sell directly to consumers.

Accepted Answer

A) True 
 B)False

Question 17

The authenticity of the information contained in the financial statements is the responsibility of the

Accepted Answer

A)  external auditor. 
B)  organization's management. 
C)  Securities and Exchange Commission. 
D)  Internal Revenue Service. 
E)  company's cost analyst(s). 
A)  external auditor. 
B)  organization's management. 
C)  Securities and Exchange Commission. 
D)  Internal Revenue Service. 
E)  company's cost analyst(s).

Question 18

The financial statement that summarizes a business's revenues and expenses for a specific time period is the

Accepted Answer

A)  Balance Sheet. 
B)  Income Statement. 
C)  Statement of Stockholders' Equity. 
D)  Statement of Cash Flows. 
E)  Statement of Fund Balance. 
A)  Balance Sheet. 
B)  Income Statement. 
C)  Statement of Stockholders' Equity. 
D)  Statement of Cash Flows. 
E)  Statement of Fund Balance.

Question 19

Which of the following might not typically be located in the financial statement footnotes?

Accepted Answer

A)  Specific accounting methods used 
B)  Significant accounting policies 
C)  Key assumptions about estimates 
D)  Specific internal business strategies 
E)  Descriptions of pending lawsuits 
A)  Specific accounting methods used 
B)  Significant accounting policies 
C)  Key assumptions about estimates 
D)  Specific internal business strategies 
E)  Descriptions of pending lawsuits

Question 20

During 2010, Green Corporation incurred the following transactions. 
‪   
Required:
Analyze the effects of each of the following transactions on Green Corporation's assets, liabilities, and stockholders' equity. Identify increases with a "+" and decreases with a "-". Identify no effect with a "0".

Accepted Answer

The answer of During 2010, Green Corporation incurred the following...

The Public Company Accounting Oversight Board is the governmental equivalent of the Financial Accounting Standards Board.

Successful companies should generally produce the majority of their cash flow from

Owners of each type of the following organizations have what type of liability for debts of that organization?

Expenses can decrease assets or increase liabilities.

An independent, external auditor's unqualified audit opinion indicates that no material misstatements exist within a set of financial statements.

The Federal Accounting Standards Board is the primary accounting rule-making authority.

The four primary financial statements included in corporate annual reports are the

Which of the following statements is false?

Footnotes to the financial statements provide crucial information that should be used by readers to make informed decisions.

An accountant employed in public accounting is often a(an)

The form and content of financial statements are specified by generally accepted auditing principles.

The most common reason for an audit to uncover financial statement errors is management fraud.

The balance sheet equation for a corporation can be expressed as assets - liabilities = stockholders' equity.

The primary function of accounting is to provide

At March 31, 2010, Gaffer's Department Store, had $1,000,000 of assets and $325,000 of liabilities. On April 10, 2010, Gaffer's paid off $125,000 of its liabilities. Total stockholders' equity at April 10, 2010, after the payment, is

Wholesalers typically sell directly to consumers.

The authenticity of the information contained in the financial statements is the responsibility of the

The financial statement that summarizes a business's revenues and expenses for a specific time period is the

Which of the following might not typically be located in the financial statement footnotes?

During 2010, Green Corporation incurred the following transactions. ‪ Required: Analyze the effects of each of the following transactions on Green Corporation's assets, liabilities, and stockholders' equity. Identify increases with a "+" and decreases with a "-". Identify no effect with a "0".

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters

Exam 1: An Introduction to the Role of Accounting in the Business World

The Public Company Accounting Oversight Board is the governmental equivalent of the Financial Accounting Standards Board.

Successful companies should generally produce the majority of their cash flow from

Owners of each type of the following organizations have what type of liability for debts of that organization?

Expenses can decrease assets or increase liabilities.

An independent, external auditor's unqualified audit opinion indicates that no material misstatements exist within a set of financial statements.

The Federal Accounting Standards Board is the primary accounting rule-making authority.

The four primary financial statements included in corporate annual reports are the

Which of the following statements is false?

Footnotes to the financial statements provide crucial information that should be used by readers to make informed decisions.

An accountant employed in public accounting is often a(an)

The form and content of financial statements are specified by generally accepted auditing principles.

The most common reason for an audit to uncover financial statement errors is management fraud.

The balance sheet equation for a corporation can be expressed as assets - liabilities = stockholders' equity.

The primary function of accounting is to provide

At March 31, 2010, Gaffer's Department Store, had $1,000,000 of assets and $325,000 of liabilities. On April 10, 2010, Gaffer's paid off $125,000 of its liabilities. Total stockholders' equity at April 10, 2010, after the payment, is

Wholesalers typically sell directly to consumers.

The authenticity of the information contained in the financial statements is the responsibility of the

The financial statement that summarizes a business's revenues and expenses for a specific time period is the

Which of the following might not typically be located in the financial statement footnotes?

During 2010, Green Corporation incurred the following transactions. ‪ Required: Analyze the effects of each of the following transactions on Green Corporation's assets, liabilities, and stockholders' equity. Identify increases with a "+" and decreases with a "-". Identify no effect with a "0".

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters