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Exam 1: Accounting: the Language of Business

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Question 31

True/False

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The separate entity assumption applies only to the corporate form of business.

A) True
B) False

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Question 32

Multiple Choice

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Which of the following is NOT part of the process of accounting for financial information?

A) Recording
B) Identifying
C) Communicating
D) Classifying

E) C) and D)
F) All of the above

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Question 33

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The process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties is called ____________________.

List at least five activities performed by managerial accountants.

The owners and managers of a business are the only users of the Financial Information.

Which of the following is NOT a type of information communicated by the financial statements?

The Securities and Exchange Commission (SEC) regulates the accounting methods and financial reporting of ____________________ owned corporations.

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

The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations.

Public accountants work on the staff of federal, state, or local governmental units.

List the "Big Four" public accounting firms in the United States.

The following are all government agencies except

An accounting system is designed to accumulate and classify data about a firm's financial affairs and summarize it in the general journal.

The SEC uses financial information to determine a company's tax base.

The Financial Accounting Standards Board is responsible for

An independent accountant who provides accounting services to the public for a fee is a

Accountants normally choose to practice in one of three areas: public accounting, managerial accounting, or ____________________ accounting.

As the first step in the development of generally accepted accounting principles, the FASB writes an exposure draft, which explains the topic under consideration.

In a sole proprietorship, the owner is responsible for the debts of the business if the firm is unable to pay.

The owners of a corporation are called ____________________.