77 test bank for financial accounting 16th edition by williams đề trắc nghiệm có đáp án

In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a management accounting report is more likely to: 1.. $7,200 Which financia

77 Test Bank for Financial Accounting 16th Edition by Williams

Multiple Choice Questions

Which of the following are not considered "external" users of financial statements?

1 A Owners

2 B Creditors

3 C Labor unions

4 D Managers

The accounting systems of most business organizations:

1 A Are tailored to meet the organization's needs for accounting information and the resources available for operating the system

2 B Are similar in design to the journals, ledgers, and worksheets illustrated

in this text

3 C Utilize data bases, rather than ledger accounts

4 D Are designed by the CPA firm that performs the annual financial audit

In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a management accounting report is more likely to:

1 A Be used by decision makers outside of the business organization

2 B Focus upon the operation results of the most recently completed

accounting period

3 C View the entire organization as the reporting entity

4 D Be tailored to the specific needs of an individual decision maker

Which of the following is not a basic function of an accounting system?

1 A To interpret and record the effects of business transactions

2 B To classify the effects of similar transactions in a manner that permits determination of various totals and subtotals useful to management

3 C To ensure that a business organization will be managed profitably.

4 D To summarize and communicate information to decision makers

Investors may be described as:

1 A Individuals and enterprises that have provided credit to a reporting entity

2 B Individuals and enterprises that own a reporting entity business

3 C Anyone that has an interest in the results of the operations of the

reporting entity

4 D Those whose primary economic activity consists of buying and selling stocks and bonds - Given

Which of the following does not describe accounting?

1 A It is commonly referred to as the language of business

2 B It is an end rather than a means to an end

3 C It is useful for decision-making

4 D It is used by businesses, governments, non-profit organizations, and individuals

The general purpose financial statements prepared annually by a corporation would not include the:

1 A Balance sheet

2 B Income tax return

3 C Income statement

4 D Statement of cash flows

Which of the following is generally not considered one of the general purpose financial statements issued by a corporation?

1 A Income statement forecast for the coming year

2 B Balance sheet

3 C Statement of financial position

4 D Statement of cash flows

A complete set of financial statements for Citywide Company, at December 31, 2014, would include each of the following, except:

1 A Balance sheet as of December 31, 2014

2 B Income statement for the year ended December 31, 2014.

3 C Statement of projected cash flows for 2015

4 D Notes containing additional information that is useful in interpreting the financial statements

The principal difference between management accounting and financial accounting is that financial accounting information is:

1 A Prepared by managers

2 B Intended primarily for use by decision makers outside the business organization

3 C Prepared in accordance with a set of accounting principles developed by the Institute of Certified Management Accountants

4 D Oriented toward measuring solvency rather than profitability

The financial statements of a business entity:

1 A Include the balance sheet, income statement, and income tax return

2 B Provide information about the cash flow prospects of the company

3 C Are the first step in the accounting process

4 D Are prepared for a fee by the Financial Accounting Standards Board

Information is cost effective when:

1 A The information aids management in controlling costs

2 B The information is based upon historical costs, rather than upon

estimated market values

3 C The value of the information exceeds the cost of producing it

4 D The information is generated by a computer based accounting system

Suppose a number of your friends have organized a company to develop and sell a new software product They have asked you to loan them $8,000 to help get the company started, and have promised to repay your $8,000 plus 10% interest in one year Of the following, which amount may be described as the return on your investment?

1 A $8,000

2 B $800

3 C $8,800

4 D $7,200

Which financial statement is primarily concerned with reporting the financial position of a business at a particular time?

1 A The balance sheet

2 B The income statement

3 C The statement of cash flows

4 D All three statements are concerned with the financial position of a business at a particular time

Which of the following is a characteristic of financial accounting information?

1 A Its preparation requires judgment

2 B It is more about the future than it is about the past

3 C None of it is based on estimates, assumptions, and judgments

4 D Notes and explanations from management are not included - Given

Which of the following decision makers is least likely to be among the users of management accounting reports developed by Sears Roebuck and Co.?

1 A The chief executive officer of Sears

2 B The manager of the Automotive Department in a Sears' store

3 C The manager of a mutual fund considering investing in Sears' common stock

4 D Internal auditors within the Sears organization

Financial statements are prepared:

1 A Only for publicly owned business organizations

2 B For corporations, but not for sole proprietorships or partnerships

3 C Primarily for the benefit of persons outside of the business organization

4 D In either monetary or nonmonetary terms, depending upon the need of the decision maker

Financial accounting information is:

1 A Designed to assist investors and creditors.

2 B Not used by managers and in income tax returns

3 C Called "special-purpose" accounting information

4 D Not applicable to individuals

Which of the following is not characteristic of financial

accounting?

1 A Information used in financial statements is prepared in conformity with generally accepted accounting principles

2 B The information is confidential and is intended for use only by company management

3 C The information is used in a wide variety of business decisions

4 D The information is developed primarily by "private accountants" that is, accountants employed by business organizations

Which of the following is considered a return "on" investment?

1 A Dividends

2 B Repayment of a loan

3 C Purchase of an asset

4 D Securing a loan

Financial statements are designed primarily to:

1 A Provide managers with detailed information tailored to the managers' specific information needs

2 B Provide people outside the business organization with information about the company's financial position and operating results

3 C Report to the Internal Revenue Service the company's taxable income

4 D Indicate to investors in a particular company the current market values of their investments

The New York Stock Exchange and the NASDAQ both require all listed companies to

1 A Register with the PCAOB (Public Company Accounting Oversight

Board)

2 B Send their financial statements directly to investors, creditors, and other users of financial information

3 C Maintain an internal audit function.

4 D Use IFRS (International Financial Reporting Standards) for financial statement reporting purposes

Which of the following is generally not considered an external user of accounting information?

1 A Stockholders of a corporation

2 B Bank lending officers

3 C Financial analysts

4 D Factory managers

The basic purpose of bookkeeping is to:

1 A Provide financial information about an economic entity

2 B Develop the types of information best-suited to specific managerial decisions

3 C Record the financial transactions of an economic entity

4 D Determine the taxable income of individuals and business entities

The best definition of an accounting system is:

1 A Journals, ledgers, and worksheets

2 B Manual or computer-based records used in developing information about

an entity for use by managers and also persons outside the organization

3 C The personnel, procedures, devices, and records used by an entity to develop accounting information and communicate this information to

decision makers

4 D The concepts, principles, and standards specifying the information which should be included in financial statements, and how that information should

be presented

Which of the following events is not a transaction that would be recorded in a company's accounting records?

1 A The purchase of equipment for cash

2 B The purchase of equipment on account

3 C The investment of additional cash in the business by the owner

4 D The death of a key executive

Which financial statement is prepared as of a specific date?

1 A The balance sheet

2 B The income statement

3 C The statement of cash flows

4 D The balance sheet, income statement, and statement of cash flows are all for a period of time rather than at a specific date

Which of the following statements is considered a "snapshot" of the business in financial or dollar terms?

1 A Statement of financial position

2 B Statement of cash flows

3 C Income statement

4 D The federal income tax return

The field of accounting may best be described as:

1 A Recording the financial transactions of an economic entity

2 B Developing information in conformity with generally accepted accounting principles

3 C The art of interpreting, measuring, and describing economic activity

4 D Developing the information required for the preparation of income tax returns

Of the following objectives of financial reporting, which is the most specific?

1 A Provide information useful in assessing amount, timing, and uncertainty

of future cash flows

2 B Provide information useful in making investment and credit decisions

3 C Provide information about economic resources, claims to resources, and changes in resources and claims

4 D Provide information useful to help the enterprise achieve its goals, objectives, and mission

Financial statements may be prepared for which time period?

1 A One year

2 B Less than one year

3 C More than one year.

4 D Any time period

A strong internal control structure:

1 A Contributes to the accuracy and verifiability of the accounting records

2 B Will prevent a business from operating at a loss

3 C Assures that a business will remain solvent

4 D Will prevent fraud, theft, and embezzlement

Although accounting information is used by a wide variety of

external parties, financial reporting is primarily directed toward the informational needs of:

1 A Investors and creditors

2 B Government agencies such as the Internal Revenue Service

3 C Customers

4 D Trade associations and labor unions

Investors and creditors are interested in the probability that their original investment or loan will eventually be returned, and that they will receive a reasonable return while their funds are

invested or borrowed These expectations are collectively referred

to as:

1 A Expected profitability

2 B The objectives of financial reporting

3 C Cash flow prospects

4 D Financial position

The objectives of an accounting system include all of the

following, except:

1 A Interpret and record the effects of business transactions

2 B Classify the effects of transactions to facilitate the preparation of reports

3 C Summarize and communicate information to decision makers

4 D Dictate the specific types of business transactions that the enterprise may engage in

77 Free Test Bank for Financial Accounting 16th

Edition by Williams Multiple Choice Questions - Page 2

In 2012 the SEC issued an extensive report regarding the use of IFRS by U.S public companies and listed which of the following

as a major obstacle to adopting IASB standards?

1 A IASB standards are generally viewed as low quality

2 B IASB's dependence on funding from the major accounting firms

3 C Cross-border financing is decreasing in popularity

4 D The IASB is not a governmental agency and therefore is not positioned

to develop accounting standards

The designation of CPA is given by:

1 A Universities

2 B States

3 C The AICPA

4 D The SEC

The basic purpose of audited financial statements is to:

1 A Provide the reporting company with assurance that all assets are

protected from theft or embezzlement

2 B Prepare financial statements for companies that do not have their own accounting departments

3 C Provide users of the financial statements with assurance that the

statements are verifiable and are presented in conformity with generally accepted accounting principles

4 D Provide both the reporting company and the users of the statements with

a written guarantee that the statements are error-free

One of the principal functions of CPAs is to:

1 A Audit income tax returns to determine if taxpayers have underpaid their income taxes

2 B Conduct audits to determine whether the employees of a business are performing their jobs honestly and efficiently

3 C Advise individual investors on stock market investments

4 D Perform audits to determine the fairness of a company's financial

statements

All of the following are characteristics of management accounting, except:

1 A Reports are used primarily by insiders rather than by persons outside of the business entity

2 B Its purpose is to assist managers in planning and controlling business operations

3 C Information must be developed in conformity with generally accepted accounting principles or with income tax regulations

4 D Information may be tailored to assist in specific managerial decisions

The accounting standards and concepts used in the preparation

of financial statements are called:

1 A Certified principles of accounting (CPA)

2 B Generally accepted accounting principles (GAAP)

3 C Federal accounting standards and bylaws (FASB)

4 D Standards enforcing consistency (SEC)

Which of the following is not an important factor in ensuring the integrity of accounting information?

1 A Institutional factors, such as standards for preparing information

2 B Professional organizations, such as the American Institute of CPAs

3 C Competence, judgment, and ethical behavior of individual accountants

4 D The cost of preparing the financial information

In the phrase "generally accepted accounting principles," the words generally accepted mean that the principles:

1 A Have been adopted by Congress or approved by the voters in a general election

2 B Are acceptable to the Internal Revenue Service

3 C Are understood and observed by all the participants in the financial reporting process

4 D Have been approved by a majority of the members of the Financial Accounting Standards Board