Question 1

Which of the following is a true statement in regards to the International Accounting Standards Board?

Accepted Answer

A)  The IASB develops all accounting principles to be used in the United States
B)  The IASB has the authority to audit financial statements of all US corporations
C)  The IASB deals with issues caused by the lack of uniform accounting principles existing in different countries
D)  The IASB was created by the American Accounting AssociationE) None of the above
F) A) and B)

Question 2

Managerial Accounting is any activity associated with the preparation of tax returns and the audit of those returns.

Accepted Answer

A) True 
 B)False

Question 3

Owners are not personally responsible for the debts of the business if the form of business organization is a

Accepted Answer

A)  partnership.
B)  nonprofit organization.
C)  corporation.
D)  sole proprietorship.E) A) and C)
F) A) and D)

Question 4

Ownership in a corporation is evidenced by shares of ________.

Accepted Answer

The answer of Ownership in a corporation is evidenced by...

Question 5

What determines the independence of Certified Public Accountants (CPAs)?

Accepted Answer

They are not employees of the ...

Question 6

List three individuals or groups who use financial information to make decisions about a firm. For each listed, give an example of why they would need the information.

Accepted Answer

Owners and managers-to evaluate results ...

Question 7

A form of business entity owned by two or more people is called a(n)________.

Accepted Answer

The answer of A form of business entity owned by...

Question 8

Identify the advantages of forming a business as an S Corporation.

Accepted Answer

A)  owner is personally responsible for debts of the business and earnings are reported directly on owner's personal tax return
B)  treated as a separate legal entity and owners avoid double taxation
C)  owners have limited liability and corporation's earnings are tax free
D)  owners avoid double taxation and owners have limited liabilityE) A) and D)
F) A) and B)

Question 9

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as

Accepted Answer

A)  managerial accounting.
B)  cost accounting.
C)  financial accounting.
D)  auditing.E) None of the above
F) A) and B)

Question 10

As the first step in the development of generally accepted accounting principles, the FASB writes a discussion memorandum, which explains the topic being considered.

Accepted Answer

A) True 
 B)False

Question 11

An example of an economic entity is

Accepted Answer

A)  a business.
B)  a town.
C)  a church.
D)  a politician.E) A) and D)
F) B) and C)

Question 12

The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the

Accepted Answer

A)  sole proprietorship.
B)  nonprofit organization.
C)  corporation.
D)  partnership.E) All of the above
F) B) and C)

Question 13

Define the following terms: entity, economic entity, and social entity.

Accepted Answer

Entity-recognized as having it...

Question 14

You have just entered college and decide to pursue a career as an accountant. What are the three areas in which an accountant can practice?

Accepted Answer

Public accounting, m...

Question 15

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as

Accepted Answer

A)  publicly owned corporations.
B)  sole proprietorships.
C)  closely held corporations.
D)  privately owned corporations.E) A) and B)
F) A) and C)

Question 16

List at least three of the provisions of the Sarbanes-Oxley Act.

Accepted Answer

The act tightens regulation of financial...

Question 17

What is the "language of business?" List three groups who use this financial information.

Accepted Answer

Accounting is the language of business. ...

Question 18

The review of financial statements to assess their fairness and adherence to GAAP is

Accepted Answer

A)  compliance.
B)  preparation.
C)  auditing.
D)  accounting.E) B) and C)
F) All of the above

Question 19

The group of accounting educators who offer their opinions about proposed FASB statements, after research has been done to determine the possible effects on financial reporting and the economy, is

Accepted Answer

A)  the FCC.
B)  the SEC.
C)  the AAA.
D)  the AICPA.E) All of the above
F) B) and C)

Question 20

Tax accounting is a service offered by public accounting firms that involves tax ________ and tax planning.

Accepted Answer

The answer of Tax accounting is a service offered by...

Exam 1: Accounting: The Language of Business

The group of accounting educators who offer their opinions about proposed FASB statements, after research has been done to determine the possible effects on financial reporting and the economy, is

Correct AnswerverifiedShow Answer

The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the

Correct AnswerverifiedShow Answer

List at least three of the provisions of the Sarbanes-Oxley Act.

Correct AnswerverifiedThe act tightens regulation of financial...View AnswerShow Answer

Which of the following is a true statement in regards to the International Accounting Standards Board?

Correct AnswerverifiedShow Answer

Ownership in a corporation is evidenced by shares of ________.

Correct AnswerverifiedShow Answer

Define the following terms: entity, economic entity, and social entity.

Correct AnswerverifiedEntity-recognized as having it...View AnswerShow Answer

A form of business entity owned by two or more people is called a(n)________.

Correct AnswerverifiedShow Answer

List three individuals or groups who use financial information to make decisions about a firm. For each listed, give an example of why they would need the information.

Correct AnswerverifiedOwners and managers-to evaluate results ...View AnswerShow Answer

Managerial Accounting is any activity associated with the preparation of tax returns and the audit of those returns.

Correct AnswerverifiedShow Answer

What is the "language of business?" List three groups who use this financial information.

Correct AnswerverifiedAccounting is the language of business. ...View AnswerShow Answer

You have just entered college and decide to pursue a career as an accountant. What are the three areas in which an accountant can practice?

Correct AnswerverifiedPublic accounting, m...View AnswerShow Answer

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as

Correct AnswerverifiedShow Answer

An example of an economic entity is

Correct AnswerverifiedShow Answer

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as

Correct AnswerverifiedShow Answer

Owners are not personally responsible for the debts of the business if the form of business organization is a

Correct AnswerverifiedShow Answer

The review of financial statements to assess their fairness and adherence to GAAP is

Correct AnswerverifiedShow Answer

As the first step in the development of generally accepted accounting principles, the FASB writes a discussion memorandum, which explains the topic being considered.

Correct AnswerverifiedShow Answer

Tax accounting is a service offered by public accounting firms that involves tax ________ and tax planning.

Correct AnswerverifiedShow Answer

Identify the advantages of forming a business as an S Corporation.

Correct AnswerverifiedShow Answer

What determines the independence of Certified Public Accountants (CPAs)?

Correct AnswerverifiedThey are not employees of the ...View AnswerShow Answer

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The act tightens regulation of financial...
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Entity-recognized as having it...
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Owners and managers-to evaluate results ...
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Accounting is the language of business. ...
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Public accounting, m...
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They are not employees of the ...
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