Chapter 1 Quiz

A  Development of more complex societies.

B  Exchange of goods and services among individuals.

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

D  Maintaining records of multiple business transactions.

A  Income earned during the current period minus dividends distributed to stockholders’ 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  The amount of income earned by the company over its life.

D  Income earned 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  International Accounting Standards Board (IASB).

B  Securities and Exchange Commission (SEC).

C  American Institute of Certified Public Accountants (AICPA).

D  Financial Accounting Standards Board (FASB).

A  Internal reporting structure.

B  Mathematical system of equations.

C  Tax allocation system.

D  Language of business.

A  Securities and Exchange Commission.

B  Generally accepted rules.

C  Auditor’s report.

D  Conceptual framework.

A  Paying the appropriate amount of taxes.

B  Quality of the work environment for employees.

C  Making good business decisions.

D  Marketing the company’s products to customers.

A  Liabilities.

B  Expenses.

C  Dividends.

D  Assets.

A  Expense.

B  Liability.

C  Dividend.

D  Asset.

A  Government officials.

B  Tax regulators.

C  Suppliers and customers.

D  Investors and creditors.

E    

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

B    

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

D  To increase the number of customers for a company.

E  To support government initiatives through taxation of company profits.

A  Mathematical procedure.

B  Behavioral psychology.

C  Artistic presentation.

D  Information measurement/communication process.

A  Auditors.

B  Auditors, Business consultants and Tax preparers/planners

C  Tax preparers/planners.

D  Business consultants.

A  Stockholders’ equity.

B  Assets.

C  Liabilities.

D  Revenues.

A  Business consulting.

B  Evaluation of internal controls.

C  Tax preparation.

D  Audit of financial statements.

A  Statement of Stockholders’ Equity.

B  Statement of Cash Flows.

C  Income Statement.

D  Balance Sheet.

A  Income Statement.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Faithful representation.

B  Consistency.

C  Comparability.

D  Predictive value.

A  Management.

B  Stockholders.

C  Creditors.

D  Auditors.

A  Net income

B  Total number of employees.

C  Geographic location.

D  Total sales to customers.

A  Assets.

B  Liabilities.

C  Dividends.

D  Expenses.

A  Balance Sheet.

B  Income Statement.

C  Statement of Stockholders’ Equity.

D  Statement of Cash Flows.

A  Relevance, comparability.

B  Relevance, faithful representation.

C  Relevance, truthfulness.

D  Truthfulness, clearness.

A  Statement of Cash Flows.

B  Statement of Stockholders’ Equity.

C  Balance Sheet.

D  Income Statement.

A  General Accounting and Audit Principles.

B  Generally Accepted Accounting Principles.

C  General Accounting Accountability Principles.

D  Generally Accepted Auditing Principles.

A  Cash paid to investors.

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

C  Sales of products or services to customers.

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  Firms that have stocks listed on an exchange.

D  Government-controlled companies.

A  Balance Sheet.

B  Statement of Cash Flows.

C  Statement of Stockholders’ Equity.

D  Income Statement.

A  Assets = Liabilities + Stockholders’ Equity.

B  Assets + Liabilities = Stockholders’ Equity.

C  Assets + Stockholders’ Equity = Liabilities.

D  Liabilities – Assets = Stockholders’ Equity.