Chapter 1 Quiz

A  Maintaining records of multiple business transactions, development of more complex societies and exchange of goods and services among individuals.

B  Development of more complex societies.

C  Maintaining records of multiple business transactions.

D  Exchange of goods and services among individuals.

A  Income earned during the current period.

B  The amount of income earned over the company’s life minus the dividends paid to shareholders over the company’s life.

C  Income earned during the current period minus dividends distributed to stockholders’ during the current period.

D  The amount of income earned by the company over its life.

A  A process of measuring income taxes owed to the government.

B  Measuring a company’s business activities and communicating those measurements to external parties.

C  Procedures designed to enhance the company’s image to potential investors.

D  A system of maintaining communication with a company’s customers and suppliers.

A  American Institute of Certified Public Accountants (AICPA).

B  International Accounting Standards Board (IASB).

C  Financial Accounting Standards Board (FASB).

D  Securities and Exchange Commission (SEC).

A  Language of business.

B  Tax allocation system.

C  Mathematical system of equations.

D  Internal reporting structure.

A  Conceptual framework.

B  Generally accepted rules.

C  Auditor’s report.

D  Securities and Exchange Commission.

A  Paying the appropriate amount of taxes.

B  Marketing the company’s products to customers.

C  Quality of the work environment for employees.

D  Making good business decisions.

A  Dividends.

B  Assets.

C  Expenses.

D  Liabilities.

A  Dividend.

B  Liability.

C  Expense.

D  Asset.

A  Government officials.

B  Investors and creditors.

C  Suppliers and customers.

D  Tax regulators.

E    

A  To provide managers with useful information related to human resources.

B  To support government initiatives through taxation of company profits.

C  To increase the number of customers for a company.

D    

E  To support the efficient distribution of society’s resources.

A  Artistic presentation.

B  Mathematical procedure.

C  Information measurement/communication process.

D  Behavioral psychology.

A  Auditors, Business consultants and Tax preparers/planners

B  Business consultants.

C  Tax preparers/planners.

D  Auditors.

A  Liabilities.

B  Revenues.

C  Stockholders’ equity.

D  Assets.

A  Audit of financial statements.

B  Business consulting.

C  Tax preparation.

D  Evaluation of internal controls.

A  Statement of Stockholders’ Equity.

B  Income Statement.

C  Balance Sheet.

D  Statement of Cash Flows.

A  Statement of Cash Flows.

B  Income Statement.

C  Statement of Stockholders’ Equity.

D  Balance Sheet.

A  Faithful representation.

B  Consistency.

C  Predictive value.

D  Comparability.

A  Management.

B  Stockholders.

C  Auditors.

D  Creditors.

A  Net income

B  Total sales to customers.

C  Geographic location.

D  Total number of employees.

A  Dividends.

B  Assets.

C  Liabilities.

D  Expenses.

A  Income Statement.

B  Statement of Stockholders’ Equity.

C  Statement of Cash Flows.

D  Balance Sheet.

A  Relevance, faithful representation.

B  Relevance, truthfulness.

C  Truthfulness, clearness.

D  Relevance, comparability.

A  Statement of Stockholders’ Equity.

B  Income Statement.

C  Statement of Cash Flows.

D  Balance Sheet.

A  General Accounting and Audit Principles.

B  Generally Accepted Accounting Principles.

C  Generally Accepted Auditing Principles.

D  General Accounting Accountability Principles.

A  Sales of products or services to customers.

B  Cash paid for the purchase of the company’s long-term resources.

C  Costs of providing products or services to customers.

D  Cash paid to investors.

A  Government-controlled companies.

B  Professional service firms that traditionally focus on auditing and tax preparation.

C  Firms that have stocks listed on an exchange.

D  Companies that sell merchandise to customers.

A  Statement of Cash Flows.

B  Income Statement.

C  Balance Sheet.

D  Statement of Stockholders’ Equity.

A  Assets + Liabilities = Stockholders’ Equity.

B  Assets + Stockholders’ Equity = Liabilities.

C  Assets = Liabilities + Stockholders’ Equity.

D  Liabilities – Assets = Stockholders’ Equity.