Chapter 1 Quiz

A  Development of more complex societies.

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

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 by the company over its life.

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

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

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

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

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

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

A  Financial Accounting Standards Board (FASB).

B  International Accounting Standards Board (IASB).

C  Securities and Exchange Commission (SEC).

D  American Institute of Certified Public Accountants (AICPA).

A  Mathematical system of equations.

B  Internal reporting structure.

C  Tax allocation system.

D  Language of business.

A  Conceptual framework.

B  Securities and Exchange Commission.

C  Auditor’s report.

D  Generally accepted rules.

A  Making good business decisions.

B  Marketing the company’s products to customers.

C  Quality of the work environment for employees.

D  Paying the appropriate amount of taxes.

A  Dividends.

B  Assets.

C  Expenses.

D  Liabilities.

A  Dividend.

B  Asset.

C  Expense.

D  Liability.

A  Government officials.

B  Tax regulators.

C  Investors and creditors.

D    

E  Suppliers and customers.

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

B  To increase the number of customers for a company.

C  To support government initiatives through taxation of company profits.

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

E    

A  Artistic presentation.

B  Mathematical procedure.

C  Information measurement/communication process.

D  Behavioral psychology.

A  Auditors.

B  Tax preparers/planners.

C  Business consultants.

D  Auditors, Business consultants and Tax preparers/planners

A  Revenues.

B  Assets.

C  Liabilities.

D  Stockholders’ equity.

A  Tax preparation.

B  Audit of financial statements.

C  Evaluation of internal controls.

D  Business consulting.

A  Income Statement.

B  Statement of Cash Flows.

C  Statement of Stockholders’ Equity.

D  Balance Sheet.

A  Balance Sheet.

B  Income Statement.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Consistency.

B  Comparability.

C  Faithful representation.

D  Predictive value.

A  Creditors.

B  Auditors.

C  Management.

D  Stockholders.

A  Net income

B  Total sales to customers.

C  Geographic location.

D  Total number of employees.

A  Assets.

B  Expenses.

C  Liabilities.

D  Dividends.

A  Income Statement.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Truthfulness, clearness.

B  Relevance, truthfulness.

C  Relevance, faithful representation.

D  Relevance, comparability.

A  Statement of Cash Flows.

B  Balance Sheet.

C  Statement of Stockholders’ Equity.

D  Income Statement.

A  General Accounting Accountability Principles.

B  General Accounting and Audit Principles.

C  Generally Accepted Auditing Principles.

D  Generally Accepted Accounting Principles.

A  Sales of products or services to customers.

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

C  Cash paid to investors.

D  Costs of providing products or services to customers.

A  Companies that sell merchandise to customers.

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

C  Government-controlled companies.

D  Firms that have stocks listed on an exchange.

A  Income Statement.

B  Statement of Stockholders’ Equity.

C  Statement of Cash Flows.

D  Balance Sheet.

A  Liabilities – Assets = Stockholders’ Equity.

B  Assets + Liabilities = Stockholders’ Equity.

C  Assets + Stockholders’ Equity = Liabilities.

D  Assets = Liabilities + Stockholders’ Equity.