Question 1

The language of accounting needs to be sufficiently general:

Accepted Answer

A)  To be easily understandable 
B)  To be applicable to a variety of situations and business models 
C)  To be flexible 
D)  To be reliable 
A)  To be easily understandable 
B)  To be applicable to a variety of situations and business models 
C)  To be flexible 
D)  To be reliable B

Question 2

What are the major differences between shareholders and lenders?

Accepted Answer

A)  The risks of the business they are willing to assume and the amount they are investing. 
B)  The kinds of activities they are willing to finance and the term for which they are investing capital. 
C)  The risks of the business they are willing to assume and the term for which they are investing capital. 
D)  The kinds of businesses they are willing to finance and the amount they are investing. 
A)  The risks of the business they are willing to assume and the amount they are investing. 
B)  The kinds of activities they are willing to finance and the term for which they are investing capital. 
C)  The risks of the business they are willing to assume and the term for which they are investing capital. 
D)  The kinds of businesses they are willing to finance and the amount they are investing. C

Question 3

The type of accounting which deals with a detailed account of how resources are acquired,managed,and used by the firm is known as.

Accepted Answer

A)  Regulated accounting. 
B)  Managerial accounting. 
C)  Financial accounting. 
D)  None of the above. 
A)  Regulated accounting. 
B)  Managerial accounting. 
C)  Financial accounting. 
D)  None of the above. B

Question 4

Initial financial resources are provided by:

Accepted Answer

A)  Customers 
B)  Managers 
C)  Suppliers 
D)  Capital providers 
A)  Customers 
B)  Managers 
C)  Suppliers 
D)  Capital providers

Question 5

Those who use financial statements base their opinion about an economic entity on the:

Accepted Answer

A)  Financial situation. 
B)  Cash generation. 
C)  Sales performance. 
D)  All of these. 
A)  Financial situation. 
B)  Cash generation. 
C)  Sales performance. 
D)  All of these.

Question 6

What are the two key missions of accounting?

Accepted Answer

A)  To facilitate value creation by supporting resource acquisition and allocation decision- making and to control managers. 
B)  To facilitate money borrowing and to measure and report to stakeholders the amount of value created during a given period. 
C)  To facilitate value creation by supporting resource acquisition and allocation decision- making and to measure and report to stakeholders the amount of value created during a given period. 
D)  To facilitate money borrowing and to control managers. 
A)  To facilitate value creation by supporting resource acquisition and allocation decision- making and to control managers. 
B)  To facilitate money borrowing and to measure and report to stakeholders the amount of value created during a given period. 
C)  To facilitate value creation by supporting resource acquisition and allocation decision- making and to measure and report to stakeholders the amount of value created during a given period. 
D)  To facilitate money borrowing and to control managers.

Question 7

Financially,lenders are rewarded by:

Accepted Answer

A)  Dividends. 
B)  Interest. 
C)  Profits. 
D)  None of the above. 
A)  Dividends. 
B)  Interest. 
C)  Profits. 
D)  None of the above.

Question 8

Which financial statement is used to show how much residual wealth was created in the transformation process?

Accepted Answer

A)  Statement of cash flows 
B)  Income statement 
C)  Statement of financial position/Balance sheet 
D)  Statement of retained earnings 
A)  Statement of cash flows 
B)  Income statement 
C)  Statement of financial position/Balance sheet 
D)  Statement of retained earnings

Question 9

Financial reporting is accounting for what the 'delegatee' has done with the resources she or he has received from the 'delegator'.

Accepted Answer

A) True 
 B)False

Question 10

Financial accounting only recognizes transactions that have or will have monetary implications.

Accepted Answer

A) True 
 B)False

Question 11

Limited liability companies must periodically file financial statements with a regulatory organization.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following describes the flow of information allowing control by the 'delegator'?

Accepted Answer

A)  Financial accounting 
B)  Reporting 
C)  Managerial accounting 
D)  Corporate finance 
A)  Financial accounting 
B)  Reporting 
C)  Managerial accounting 
D)  Corporate finance

Question 13

Many countries have created bodies to set standards and define and regulate the terms of accounting in order to:

Accepted Answer

A)  Facilitate measurement of wealth creation. 
B)  Facilitate the support financial markets provide to the development of businesses. 
C)  Open exchanges. 
D)  All of these. 
A)  Facilitate measurement of wealth creation. 
B)  Facilitate the support financial markets provide to the development of businesses. 
C)  Open exchanges. 
D)  All of these.

Question 14

Accounting reports are prepared only for capital providers.

Accepted Answer

A) True 
 B)False

Question 15

Shareholders want to know periodically.

Accepted Answer

A)  If the firm they have invested in is able to reimburse the money it has borrowed and how much residual wealth was created in the transformation process that they can claim as theirs. 
B)  What the firm they have invested in owns and how much of the residual wealth created in the transformation process they can claim as theirs. 
C)  What the firm they have invested in owns and how much managers are paid. 
D)  If the firm they have invested in is able to reimburse the money it has borrowed and how much managers are paid. 
A)  If the firm they have invested in is able to reimburse the money it has borrowed and how much residual wealth was created in the transformation process that they can claim as theirs. 
B)  What the firm they have invested in owns and how much of the residual wealth created in the transformation process they can claim as theirs. 
C)  What the firm they have invested in owns and how much managers are paid. 
D)  If the firm they have invested in is able to reimburse the money it has borrowed and how much managers are paid.

Question 16

Which of the following statements is true?

Accepted Answer

A)  The border between managerial accounting and financial accounting is clearly defined 
B)  Managerial accounting and financial accounting are totally distinct from one another 
C)  There is no difference between managerial accounting and financial accounting 
D)  Managerial accounting and financial accounting are closely linked 
A)  The border between managerial accounting and financial accounting is clearly defined 
B)  Managerial accounting and financial accounting are totally distinct from one another 
C)  There is no difference between managerial accounting and financial accounting 
D)  Managerial accounting and financial accounting are closely linked

Question 17

The origins of accounting are often traced to:

Accepted Answer

A)  The Roman Empire. 
B)  The Byzantine Empire. 
C)  The Middle Ages. 
D)  The times of Sumer. 
A)  The Roman Empire. 
B)  The Byzantine Empire. 
C)  The Middle Ages. 
D)  The times of Sumer.

Question 18

Accounting standards are authoritative statements.

Accepted Answer

A) True 
 B)False

Question 19

The usefulness of financial information is enhanced if it is comparable,verifiable,timely and relevant.

Accepted Answer

A) True 
 B)False

Question 20

Accounting is a specialized language.It needs to be specific enough to:

Accepted Answer

A)  Describe a state or a result 
B)  Provide a rank ordering of results 
C)  Describe the events that led to a result 
D)  All of these. 
A)  Describe a state or a result 
B)  Provide a rank ordering of results 
C)  Describe the events that led to a result 
D)  All of these.

The language of accounting needs to be sufficiently general:

What are the major differences between shareholders and lenders?

The type of accounting which deals with a detailed account of how resources are acquired,managed,and used by the firm is known as.

Initial financial resources are provided by:

Those who use financial statements base their opinion about an economic entity on the:

What are the two key missions of accounting?

Financially,lenders are rewarded by:

Which financial statement is used to show how much residual wealth was created in the transformation process?

Financial reporting is accounting for what the 'delegatee' has done with the resources she or he has received from the 'delegator'.

Financial accounting only recognizes transactions that have or will have monetary implications.

Limited liability companies must periodically file financial statements with a regulatory organization.

Which of the following describes the flow of information allowing control by the 'delegator'?

Many countries have created bodies to set standards and define and regulate the terms of accounting in order to:

Accounting reports are prepared only for capital providers.

Shareholders want to know periodically.

Which of the following statements is true?

The origins of accounting are often traced to:

Accounting standards are authoritative statements.

The usefulness of financial information is enhanced if it is comparable,verifiable,timely and relevant.

Accounting is a specialized language.It needs to be specific enough to:

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters

Exam 1: Accounting: the Language of Business

The language of accounting needs to be sufficiently general:

What are the major differences between shareholders and lenders?

The type of accounting which deals with a detailed account of how resources are acquired,managed,and used by the firm is known as.

Initial financial resources are provided by:

Those who use financial statements base their opinion about an economic entity on the:

What are the two key missions of accounting?

Financially,lenders are rewarded by:

Which financial statement is used to show how much residual wealth was created in the transformation process?

Financial reporting is accounting for what the 'delegatee' has done with the resources she or he has received from the 'delegator'.

Financial accounting only recognizes transactions that have or will have monetary implications.

Limited liability companies must periodically file financial statements with a regulatory organization.

Which of the following describes the flow of information allowing control by the 'delegator'?

Many countries have created bodies to set standards and define and regulate the terms of accounting in order to:

Accounting reports are prepared only for capital providers.

Shareholders want to know periodically.

Which of the following statements is true?

The origins of accounting are often traced to:

Accounting standards are authoritative statements.

The usefulness of financial information is enhanced if it is comparable,verifiable,timely and relevant.

Accounting is a specialized language.It needs to be specific enough to:

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters