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Principles of Accounting, Volume 1: Financial Accounting

Multiple Choice

Principles of Accounting, Volume 1: Financial AccountingMultiple Choice
1.

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

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

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
3.

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
4.

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
5.

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
6.

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.
7.

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
8.

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
9.

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
10.

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
11.

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
12.

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
13.

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
14.

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
15.

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
16.

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
17.

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
18.

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
19.

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
20.

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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