test bank accounting; what the numbers mean 11th 11e

Chapter 01 Accounting-Present and Past Multiple Choice Questions Which of the following entities would not require accounting information pertaining to their economic activities? A B C D E Not-for-profit entities State governmen All of the above require accounting information None of the above requires accounting information The authoritative financial accounting standards-setting body in the United States is presently the: A B C D E Securities and Exchange Commission (SEC) International Accounting Standards Board (IASB) Public Company Accounting Oversights Board (PCAOB) Financial Accounting Standards Board (FASB) Accounting Principles Board (APB) Which of the following statements about the Financial Accounting Standards Board is correct? A B C D E The FASB is an agency of the Federal government The FASB has the authority to fine a noncompliant firm The FASB follows a due process procedure that permits input from interested part The FASB is controlled by the American Institute of CPA's None of the above statements is correct Major classifications of accounting activity would not include: A B C D financial accounting, internal auditing, public accounting internal auditing, governmental accounting, managerial accounting financial accounting, national accounting, cost accounting auditing, income tax accounting, governmental accounting 1-1 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information? A B C D Future profitability based on past profitability Probability of success of a new product development A forecast of dividends Assessment of risk that a company may have more debt than it can repay if the e Which of the following is not an example of a decision or informed judgment that a potential employee could make from accounting information? A B C D Personnel turnover statistics (i.e., hiring and terminations) Probability of the company's ability to make profit sharing plan contributions in th Assessment of the risk that the company may become bankrupt in the near fu The extent of the company's commitment to a research program Which of the following are qualified to express an auditor's opinion about an entity's financial statements? A B C D E A Certified Management Accountant A Certified Internal Auditor A Certified Public Accountant None of the above Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity? A B C D Financial accounting Auditing-Public accounting Managerial accounting Income tax accounting An unqualified auditors' opinion about an entity's financial statements: A B C D is a clean bill of health means that all of the entity's transactions during the audited period were checke guarantees that the entity was not involved in or the victim of any fraudulent acti states that they are presented in conformance with U.S generally accepted accou 10 Cost accounting is a subset of which of the following? A B C D Managerial accounting 1-2 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 11 The officer of a corporation responsible for the firm's published financial statements would be most concerned about pronouncements of the: A B C D E 12 Which of the following is not a characteristic or limitation of the kind of information that financial reporting by business enterprises can provide? A B C D The information results in approximate, rather than exact, measures The information largely reflects the financial effects of transactions that have alrea The information is provided and used at a cost All of the above are characteristics or limitations of the kind of information that fin 13 The ethical concept of independence means that an accountant employed: A B C D by a corporation cannot prepare financial statements for use by the company's by one company cannot work part-time for another company by an auditing firm cannot own any stock in the company being audited by one company cannot accept a job with another company in the same indus 14 The objectives of financial reporting for nonbusiness enterprises: A B C D are exactly the same as those for business enterprises focus on providing information for resource providers, rather than investors have more of an internal utilization rather than external reporting focus not give consideration to the cost of providing information 15 The ethical concept of integrity means that an individual must: A B C D sign a pledge to abide by all laws and regulations report to a supervisor any violation of the code of conduct of her company that is read, understand, and agree to follow all provisions of her employer's code of co attempt to be honest and forthright in dealings and communications with othe 16 Which of the following is an objective of financial reporting by business enterprises? A B C D Financial reporting should provide assurance that all liabilities of business enterpri Financial reporting should show the timing and amount of future cash dividends to The primary focus of financial reporting is information about the assets of the e Financial reporting should provide information about the economic resources of a 1-3 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 17 Which of the following is true about the International Accounting Standards Board (IASB)? A B C D E The IASB has been working with the FASB in recent years to achieve convergence The goal of the IASB is to develop a single set of high quality, understandable, enf The SEC has delegated full authority to the IASB to be the accounting standards s All of the above are correct Only A and B are correct 18 The provisions of the Sarbanes-Oxley Act of 2002 had the following components: A B C D E None of the above are provisions A, B and C are correct 19 Accounting can be defined as: A B C D E the process of preparing and auditing an entity's financial statements the process of identifying, measuring, and communicating economic information a the process of communicating the financial results of corporate activities to inves None of the above definitions are correct A, B and C are correct 20 Over the years, the Securities and Exchange Commission (SEC) has delegated its statutory authority to establish accounting principles for publicly traded companies in the United States to each of the following organizations except the: A B C D E Committee on Accounting Procedures of the American Institute of Accountants Accounting Principles Board (APB) Financial Accounting Standards Board (FASB) None of the above organizations were ever delegated authority by the SEC to est Each of the organizations listed in A, B, and C were at one time or another delegat 21 Which of the following was not one of the reasons for the FASB's decision to undertake the Conceptual Framework project? A B C D To provide a structure or framework of financial accounting concepts To describe concepts that will underlie guidance on future accounting practices an To provide detailed, industry-specific authoritative guidance for the accounting an To facilitate the FASB's efforts in developing accounting and reporting guidance b 1-4 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Chapter 01 Accounting-Present and Past Answer Key Multiple Choice Questions 1-5 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education Which of the following entities would not require accounting information pertaining to their economic activities? AS oc ial cl u bs BN ot for pr ofi t en tit ie s CSt at e go ve rn m en ts D All of th e ab ov e re qu ire ac co un tin g inf or m ati on 1-6 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education E No ne of th e ab ov e re qu ire s ac co un tin g inf or m ati on AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01-02 Identify who the users of accounting information are and explain why they find accounting information useful Topic: What is Accounting? 1-7 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 1-8 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education The authoritative financial accounting standards-setting body in the United States is presently the: A Se cu riti es an d Ex ch an ge Co m mi ssi on (S EC ) B Int er na tio na l Ac co un tin g St an da rd s Bo ar d (IA SB ) 1-9 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education C Pu bli c Co m pa ny Ac co un tin g Ov er sig ht s Bo ar d (P CA O B) D Fin an ci al Ac co un tin g St an da rd s Bo ar d (F AS B) 1-10 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01-01 Explain the definition of accounting Topic: What is Accounting? 1-82 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 1-83 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 20 Over the years, the Securities and Exchange Commission (SEC) has delegated its statutory authority to establish accounting principles for publicly traded companies in the United States to each of the following organizations except the: A Co m mi tte e on Ac co un tin g Pr oc ed ur es of th e A m eri ca n Ins tit ut e of Ac co un ta nt s B Ac co un tin g Pri nc ipl es Bo ar d (A PB ) 1-84 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education C Fin an ci al Ac co un tin g St an da rd s Bo ar d (F AS B) 1-85 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education D No ne of th e ab ov e or ga niz ati on s we re ev er de le ga te d au th ori ty by th e SE C to es ta bli sh ac co un tin g pri nci pl es in th e U S 1-86 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education E Ea ch of th e or ga niz ati on s list ed in A, B, an d C we re at on e ti m e or an ot he r de le ga te d au th ori ty by th e SE C to es ta bli sh ac co un tin 1-87 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education g pri nci pl es in th e U S AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Medium Learning Objective: 01-04 Summarize the development of accounting from a broad historical perspective Topic: How has Accounting Developed? 1-88 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 1-89 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 21 Which of the following was not one of the reasons for the FASB's decision to undertake the Conceptual Framework project? A To pr ov id e a str uc tur e or fra m ew or k of fin an cia l ac co un tin g co nc ep ts 1-90 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education B To de scr ib e co nc ep ts th at wil l un de rli e gu id an ce on fut ur e ac co un tin g pr ac tic es an d in du e co ur se se rv e as a ba sis for ev al ua tin g 1-91 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education exi sti ng gu id an ce an d pr ac tic es 1-92 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education C To pr ovi de de tai le d, in du str ysp eci fic au th ori tat ive gu id an ce for th e ac co un tin g an d fin an cia l re po rti ng of co m pl ex bu sin es s tra ns ac tio ns 1-93 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education 1-94 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education D To fa cili tat e th e FA SB 's eff ort s in de vel op in g ac co un tin g an d re po rti ng gu id an ce by pr ovi di ng a co m m on fo un da tio n an d ba sic re as on 1-95 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Medium Learning Objective: 01-08 Summarize the reasons for the FASB’s Conceptual Framework project Topic: How has Accounting Developed? 1-96 Copyright © 2017 McGraw-Hill Education All rights reserved No reproduction or distribution without the prior written consent of McGraw-Hill Education ... terminations) Probability of the company's ability to make profit sharing plan contributions in th Assessment of the risk that the company may become bankrupt in the near fu The extent of the company's commitment... health means that all of the entity's transactions during the audited period were checke guarantees that the entity was not involved in or the victim of any fraudulent acti states that they are... convergence The goal of the IASB is to develop a single set of high quality, understandable, enf The SEC has delegated full authority to the IASB to be the accounting standards s All of the above