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LO 1.1Accounting is sometimes called the “language of _____.”

  1. Wall Street
  2. business
  3. Main Street
  4. financial statements

LO 1.2Financial accounting information ________.

  1. should be incomplete in order to confuse competitors
  2. should be prepared differently by each company
  3. provides investors guarantees about the future
  4. summarizes what has already occurred

LO 1.2External users of financial accounting information include all of the following except ________.

  1. lenders such as bankers
  2. governmental agencies such as the IRS
  3. employees of a business
  4. potential investors

LO 1.2Which of the following groups would have access to managerial accounting information?

  1. bankers
  2. investors
  3. competitors of the business
  4. managers

LO 1.2All of the following are examples of managerial accounting activities except ________.

  1. preparing external financial statements in compliance with GAAP
  2. deciding whether or not to use automation
  3. making equipment repair or replacement decisions
  4. measuring costs of production for each product produced

LO 1.3Which of the following is not true?

  1. Organizations share a common purpose or mission.
  2. Organizations have inflows and outflows of resources.
  3. Organizations add value to society.
  4. Organizations need accounting information.

LO 1.3The primary purpose of what type of business is to serve a particular need in the community?

  1. for-profit
  2. not-for-profit
  3. manufacturing
  4. retail

LO 1.3Which of the following is not an example of a retailer?

  1. electronics store
  2. grocery store
  3. car dealership
  4. computer manufacturer
  5. jewelry store

LO 1.3A governmental agency can best be described by which of the following statements?

  1. has a primary purpose of making a profit
  2. has a primary purpose of using taxpayer funds to provide services
  3. produces goods for sale to the public
  4. has regular shareholder meetings

LO 1.3Which of the following is likely not a type of not-for-profit entity?

  1. public library
  2. community foundation
  3. university
  4. local movie theater

LO 1.4Which of the following is not considered a stakeholder of an organization?

  1. creditors
  2. lenders
  3. employees
  4. community residents
  5. a business in another industry

LO 1.4Stockholders can best be defined as which of the following?

  1. investors who lend money to a business for a short period of time
  2. investors who lend money to a business for a long period of time
  3. investors who purchase an ownership in the business
  4. analysts who rate the financial performance of the business

LO 1.4Which of the following sell stock on an organized stock exchange such as the New York Stock Exchange?

  1. publicly traded companies
  2. not-for-profit businesses
  3. governmental agencies
  4. privately held companies
  5. government-sponsored entities

LO 1.4All of the following are sustainable methods businesses can use to raise capital (funding) except for ________.

  1. borrowing from lenders
  2. selling ownership shares
  3. profitable operations
  4. tax refunds

LO 1.4The accounting information of a privately held company is generally available to all of the following except for ________.

  1. governmental agencies
  2. investors
  3. creditors and lenders
  4. competitors

LO 1.5Which of the following skills/attributes is not a primary skill for accountants to possess?

  1. written communication
  2. verbal communication
  3. ability to work independently
  4. analytical thinking
  5. extensive computer programing background

LO 1.5Which of the following is typically required for entry-level positions in the accounting profession?

  1. bachelor’s degree
  2. master’s degree
  3. Certified Public Accountant (CPA)
  4. Certified Management Accountant (CMA)
  5. only a high school diploma

LO 1.5Typical accounting tasks include all of the following tasks except ________.

  1. auditing
  2. recording and tracking costs
  3. tax compliance and planning
  4. consulting
  5. purchasing direct materials

LO 1.5What type of organization primarily offers tax compliance, auditing, and consulting services?

  1. corporations
  2. public accounting firms
  3. governmental entities
  4. universities

LO 1.5Most states require 150 semester hours of college credit for which professional certification?

  1. Certified Management Accountant (CMA)
  2. Certified Internal Auditor (CIA)
  3. Certified Public Accountant (CPA)
  4. Certified Financial Planner (CFP)
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