Chapter 1 Quiz

A  Exchange of goods and services among individuals.

B  Development of more complex societies.

C  Maintaining records of multiple business transactions.

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

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

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  Income earned during the current period.

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

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

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

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

A  Securities and Exchange Commission (SEC).

B  American Institute of Certified Public Accountants (AICPA).

C  International Accounting Standards Board (IASB).

D  Financial Accounting Standards Board (FASB).

A  Language of business.

B  Internal reporting structure.

C  Mathematical system of equations.

D  Tax allocation system.

A  Conceptual framework.

B  Auditor’s report.

C  Securities and Exchange Commission.

D  Generally accepted rules.

A  Paying the appropriate amount of taxes.

B  Making good business decisions.

C  Marketing the company’s products to customers.

D  Quality of the work environment for employees.

A  Expenses.

B  Assets.

C  Liabilities.

D  Dividends.

A  Asset.

B  Liability.

C  Dividend.

D  Expense.

A    

B  Tax regulators.

C  Government officials.

D  Suppliers and customers.

E  Investors and creditors.

A  To support government initiatives through taxation of company profits.

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

C  To increase the number of customers for a company.

D    

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

A  Mathematical procedure.

B  Behavioral psychology.

C  Artistic presentation.

D  Information measurement/communication process.

A  Auditors, Business consultants and Tax preparers/planners

B  Business consultants.

C  Tax preparers/planners.

D  Auditors.

A  Liabilities.

B  Stockholders’ equity.

C  Assets.

D  Revenues.

A  Tax preparation.

B  Evaluation of internal controls.

C  Business consulting.

D  Audit of financial statements.

A  Income Statement.

B  Statement of Stockholders’ Equity.

C  Balance Sheet.

D  Statement of Cash Flows.

A  Balance Sheet.

B  Statement of Stockholders’ Equity.

C  Income Statement.

D  Statement of Cash Flows.

A  Predictive value.

B  Consistency.

C  Faithful representation.

D  Comparability.

A  Auditors.

B  Creditors.

C  Management.

D  Stockholders.

A  Total number of employees.

B  Total sales to customers.

C  Net income

D  Geographic location.

A  Assets.

B  Liabilities.

C  Expenses.

D  Dividends.

A  Statement of Stockholders’ Equity.

B  Balance Sheet.

C  Income Statement.

D  Statement of Cash Flows.

A  Relevance, faithful representation.

B  Truthfulness, clearness.

C  Relevance, truthfulness.

D  Relevance, comparability.

A  Income Statement.

B  Statement of Stockholders’ Equity.

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  Cash paid to investors.

B  Costs of providing products or services to customers.

C  Sales of products or services to customers.

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

A  Government-controlled companies.

B  Companies that sell merchandise to customers.

C  Firms that have stocks listed on an exchange.

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

A  Income Statement.

B  Statement of Stockholders’ Equity.

C  Balance Sheet.

D  Statement of Cash Flows.

A  Assets + Stockholders’ Equity = Liabilities.

B  Assets = Liabilities + Stockholders’ Equity.

C  Assets + Liabilities = Stockholders’ Equity.

D  Liabilities – Assets = Stockholders’ Equity.