Chapter 01 Introduction to Accounting - ?· Chapter 01 - Introduction to Accounting 1-1 ... Chapter…

Download Chapter 01 Introduction to Accounting - ?· Chapter 01 - Introduction to Accounting 1-1 ... Chapter…

Post on 09-Jun-2018

228 views

Category:

Documents

8 download

Embed Size (px)

TRANSCRIPT

<ul><li><p>Chapter 01 - Introduction to Accounting </p><p>1-1 </p><p>Chapter 01 Introduction to Accounting </p><p> True / False Questions </p><p>1. Accounting is an information and measurement system that identifies, records, and communicates financial information to users. True False </p><p>2. Bookkeeping is the same as accounting. True False </p><p>3. Bookkeeping is the recording of transactions and events and is only part of accounting. True False </p><p>4. Accounting is one way important information about businesses is reported to decision makers. True False </p><p>5. Internal reports are subject to the same rules as external reports as consistency is important and makes information more useful to the user. True False </p><p>6. Accounting software packages reduce the time, effort and cost of recordkeeping. True False </p><p>7. Internal auditors assess an employer's procedures and controls over recordkeeping activities and physical control of a firm's assets. True False </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-2 </p><p>8. Internal controls are procedures designed to protect company property, ensure reliable reports, promote efficiency and ensure employees follow company policies. True False </p><p>9. Accounting information systems collect, process and report information to decision makers. True False </p><p>10. Managerial accounting is an area of accounting that provides internal reports to assist in the decision-making needs of internal users. True False </p><p>11. The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities. True False </p><p>12. Opportunities in accounting include auditing, management consulting, and tax planning. True False </p><p>13. The Financial Accounting Standards Board is the private group that sets both broad and specific accounting principles. True False </p><p>14. Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements. True False </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-3 </p><p>15. Generally accepted accounting principles were established to improve conformity in financial reporting by making information relevant, reliable and comparable. True False </p><p>16. US accounting practices are viewed as rule-based as financial statements are prepared using technical, specific and detailed rules. True False </p><p>17. External auditors examine financial statements to determine if they are prepared according to generally accepted accounting principles. True False </p><p>18. External users include lenders, shareholders, customers, and regulators. True False </p><p>19. Internal users include lenders, shareholders, brokers and managers. True False </p><p>20. Identifying the proper ethical path is easy. True False </p><p>21. Ethics are not important to decision making in accounting. True False </p><p>22. Guidelines for ethical decision making requires recognition of an ethical concern and consideration of good and bad consequences. True False </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-4 </p><p>23. Good ethics are good business. True False </p><p>24. State ethics codes require CPAs who audit financial statements to disclose areas where those statements fail to comply with GAAP. True False </p><p>25. Public accounting provides the majority of the career opportunities. True False </p><p>26. The majority of accounting career opportunities are in the private sector. True False </p><p>27. Understanding generally accepted accounting principles is not necessary to use and interpret financial statements. True False </p><p>28. The Sarbanes-Oxley Act requires issuers of securities to disclose the adoption of an ethics code. True False </p><p>29. The Securities and Exchange Commission (SEC) is an arm of the federal government that establishes reporting requirements for companies that issue stock to the public. True False </p><p>30. The Financial Accounting Board is the group that establishes reporting requirements for companies that issue stock to the public. True False </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-5 </p><p>31. A limited liability company is treated like a corporation for liability and tax purposes. True False </p><p>32. Separate legal status means that a corporation can conduct business with the rights, duties and responsibilities as a person. True False </p><p>33. Separate legal status means that owners, called shareholders are not personally liable for corporate acts and debts. True False </p><p>34. Three forms of business include service providers, wholesalers and retailers. True False </p><p> Multiple Choice Questions </p><p>35. The primary objective of financial accounting is: A. To serve the decision-making needs of internal users. B. To provide financial statements to help external users analyze an organization's activities. C. To monitor and control company activities. D. To provide information on both the costs and benefits of looking after products and services. E. To know what, when, and how much to produce. </p><p>36. External users of accounting information include: A. Shareholders. B. Customers. C. Creditors. D. Government regulators. E. All of these. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-6 </p><p>37. Career opportunities in accounting include: A. Auditing. B. Management consulting. C. Tax accounting. D. Cost accounting. E. All of these. </p><p>38. Internal users of accounting information include: A. Shareholders. B. Managers. C. Lenders. D. Suppliers. E. Customers. </p><p>39. Accounting is an information and measurement system that: A. Identifies business activities. B. Records business activities. C. Communicates business activities. D. Helps people make better decisions. E. All of these. </p><p>40. Accounting software: A. Has replaced the need for accountants. B. Has not changed the work that accountants do. C. Has improved clerical accuracy. D. Has replaced the need for decision makers. E. Is only available to large corporations. </p><p>41. The area of accounting aimed at serving the decision-making needs of internal users is: A. Financial accounting. B. Managerial accounting. C. External auditing. D. SEC reporting. E. Bookkeeping. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-7 </p><p>42. The financial statements prepared for external users is often referred to as A. The books. B. Integrated financial statements. C. Statements of financial position. D. General purpose financial statements. E. Proforma financial statements. </p><p>43. The organization responsible for overseeing the work of external auditors is the: A. FASB. B. SEC. C. PCAOB. D. GAAP. E. AICPA. </p><p>44. Career opportunities in accounting include: A. Budgeting. B. Auditing. C. Cost accounting. D. Internal Auditing. E. All of these. </p><p>45. Accounting certifications include the: A. Certified Public Accountant. B. Certified Management Accountant. C. Certified Internal Auditor. D. Certified Bookkeeper. E. All of these. </p><p>46. A Certified Public Accountant. A. Must meet education and experience requirements. B. Must pass an examination. C. Must exhibit ethical character. D. May also be a Certified Management Accountant. E. All of these. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-8 </p><p>47. Ethical behavior: A. Requires that auditors' pay not depend on the figures in the client's reports. B. Encourages auditors to invest in businesses they audit. C. Does not affect external users. D. Is rarely an issue in business. E. All of these. </p><p>48. The rules adopted by the accounting profession as guides in preparing financial statements are: A. Comprised of both general and specific principles. B. Known as generally accepted accounting principles. C. Abbreviated as GAAP. D. Intended to make information in financial statements relevant, reliable, and comparable. E. All of these. </p><p>49. The board of directors report to A. Shareholders. B. Lenders. C. Management. D. SEC. E. All of these. </p><p>50. The committee that attempts to create more harmony among the accounting practices of different countries by identifying preferred practices and encouraging their worldwide acceptance is the: A. AICPA. B. FASB. C. CAP. D. SEC. E. IASB. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-9 </p><p>51. The private board that currently has the authority to establish generally accepted accounting principles is the: A. APB. B. FASB. C. AAA. D. AICPA. E. SEC. </p><p>52. Rules adopted by the accounting profession to make information relevant, reliable and comparable: A. Are comprised of both general and specific principles. B. Are known as generally accepted accounting principles. C. Are abbreviated as GAAP. D. Are established by FASB and SEC. E. All of these. </p><p>53. In order to be useful, accounting information must be A. Reliable. B. Relevant. C. Conform to GAAP. D. Both a and b. E. All of these. </p><p>54. Generally accepted accounting principles: A. Are practices adopted by accountants to make accounting easier. B. Are only necessary when convenient. C. Can be overruled if approved by the SEC. D. Strive to make information relevant, reliable and comparable. E. None of these. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-10 </p><p>55. The International Accounting Standards Board (IASB) A. Hopes to create harmony among accounting practices of different countries. B. Is the government group that establishes reporting requirements for companies that issue stock to the public. C. Has the authority to impose its standards on companies. D. Is the only source of generally accepted accounting principles (GAAP). E. Only applies to companies that are members of the European Union. </p><p>56. Accounting A. Is an information and measurement system. B. Identifies, records, and communicates information about business activities. C. Helps people make better decisions. D. Provides information about a company's performance. E. All of these. </p><p>57. Examples of social responsibility include: A. Donating computers to a local elementary school. B. Enacting stricter production-pollution standards. C. Sponsoring a summer free-lunch program. D. Improving lighting in a production room. E. All of these. </p><p>58. Ethics: A. Are beliefs that separate right from wrong. B. And law often coincide. C. Help to prevent conflicts of interest. D. Are critical in accounting. E. All of these. </p><p> Essay Questions </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-11 </p><p>59. What are the author's recommended three steps for making a good ethical decision? </p><p>60. What aspects of business involve accounting? </p><p>61. Explain why accounting is referred to as "the language of business". </p><p>62. What is social responsibility? </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-12 </p><p>63. What is the purpose of the internal controls in a company? </p><p>64. What are some examples of how an organization can act socially responsible? </p><p>65. Explain the role of accounting in the information age. </p><p>66. Explain the flow of accounting in a business's activities. </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-13 </p><p>67. What role does technology play in the accounting function? </p><p>68. Identify several opportunities in accounting and its related fields. </p><p>69. Identify the users and uses of accounting information. </p><p>70. What are two questions that an owner might be able to answer by looking at accounting information? </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-14 </p><p>71. Explain why ethics are an integral part of accounting. </p><p>72. Identify the two main groups involved in establishing generally accepted accounting principles. </p><p>73. How do the information needs of external users such as lenders differ from an external auditor? </p><p> Fill in the Blank Questions </p><p>74. ______________________ is the recording of financial transactions and events, either manually or electronically. ________________________________________ </p><p>75. ____________________ is the information and measurement system that identifies, records, and communicates relevant information about a company's business activities. ________________________________________ </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-15 </p><p>76. _______________ are those that use accounting information for the purpose of managing the organization. ________________________________________ </p><p>77. _________ are beliefs that separate right from wrong. ________________________________________ </p><p>78. __________________________ is the recording of transactions or events, and is just one part of accounting. ________________________________________ </p><p>79. ______________ users of accounting information are not directly involved in running the organization. ________________________________________ </p><p>80. ______________ is the area of accounting aimed at serving external users. ________________________________________ </p><p>81. Managerial Accounting is the area of accounting mainly aimed at serving the decision-making needs of the _______________. ________________________________________ </p><p>82. _____________________ is the federal agency that sets reporting rules for organizations that sell ownership shares to the public. ________________________________________ </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-16 </p><p>83. Shareholders are owners of a corporation and typically elect ______________________ to oversee their interests in the corporation. ________________________________________ </p><p>84. ______________________ are procedures set up to protect company property and equipment, ensure reliable accounting reports, promote efficiency, and encourage adherence to company policies. ________________________________________ </p><p>85. A primary purpose of ________________ is to make information in financial statements relevant, reliable and comparable. ________________________________________ </p><p>86. ____________________ is the independent group of full-time members responsible for setting the rules of accounting. ________________________________________ </p><p>87. Accounting is an ______________________ that identifies, records and communicates relevant, reliable and comparable information about an organization's economic activities. ________________________________________ </p><p>88. International Accounting Standards Board is the group that works to identify ______________ and encourages global acceptance. ________________________________________ </p></li><li><p>Chapter 01 - Introduction to Accounting </p><p>1-17 </p><p>Chapter 01 Introduction to Accounting Answer Key </p><p> True / False Questions </p><p>1. Accounting is an information and measurement system that identifies, records, and communicates financial information to users. TRUE </p><p> AACSB: Analytic; Communications AICPA BB: Critical Thinking; Industry AICPA FN: Measurement; Reporting Bloom's Taxonomy: Comprehension Difficulty: Easy Learning Objective: 1 </p><p>2. Bookkeeping is the same as accounting. FALSE </p><p> AACSB: Analytic; Communications AICPA BB: Critical Thinking; Industry AICPA FN: Measurement; Reporting Bloom's Taxonomy: Comprehension Difficulty: Easy Learning Objective: 1 </p><p>3. Bookkeeping is the recording of transactions and events and is only part of accounting. TRUE </p><p> AACSB: Ana...</p></li></ul>