Chapter 1 Quiz

A  Maintaining records of multiple business transactions.

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  Development of more complex societies.

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

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

C  Income earned during the current period.

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

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

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

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

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  Financial Accounting Standards Board (FASB).

D  American Institute of Certified Public Accountants (AICPA).

A  Language of business.

B  Tax allocation system.

C  Internal reporting structure.

D  Mathematical system of equations.

A  Securities and Exchange Commission.

B  Generally accepted rules.

C  Auditor’s report.

D  Conceptual framework.

A  Quality of the work environment for employees.

B  Marketing the company’s products to customers.

C  Making good business decisions.

D  Paying the appropriate amount of taxes.

A  Liabilities.

B  Dividends.

C  Expenses.

D  Assets.

A  Expense.

B  Liability.

C  Asset.

D  Dividend.

A  Tax regulators.

B  Government officials.

C  Investors and creditors.

D    

E  Suppliers and customers.

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

B  To support government initiatives through taxation of company profits.

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

D  To increase the number of customers for a company.

E    

A  Mathematical procedure.

B  Information measurement/communication process.

C  Artistic presentation.

D  Behavioral psychology.

A  Auditors.

B  Auditors, Business consultants and Tax preparers/planners

C  Tax preparers/planners.

D  Business consultants.

A  Assets.

B  Revenues.

C  Liabilities.

D  Stockholders’ equity.

A  Tax preparation.

B  Business consulting.

C  Evaluation of internal controls.

D  Audit of financial statements.

A  Balance Sheet.

B  Income Statement.

C  Statement of Stockholders’ Equity.

D  Statement of Cash Flows.

A  Balance Sheet.

B  Income Statement.

C  Statement of Stockholders’ Equity.

D  Statement of Cash Flows.

A  Faithful representation.

B  Consistency.

C  Predictive value.

D  Comparability.

A  Auditors.

B  Management.

C  Stockholders.

D  Creditors.

A  Geographic location.

B  Total number of employees.

C  Net income

D  Total sales to customers.

A  Expenses.

B  Dividends.

C  Assets.

D  Liabilities.

A  Statement of Cash Flows.

B  Income Statement.

C  Balance Sheet.

D  Statement of Stockholders’ Equity.

A  Truthfulness, clearness.

B  Relevance, truthfulness.

C  Relevance, faithful representation.

D  Relevance, comparability.

A  Statement of Stockholders’ Equity.

B  Income Statement.

C  Balance Sheet.

D  Statement of Cash Flows.

A  Generally Accepted Auditing Principles.

B  General Accounting and Audit Principles.

C  Generally Accepted Accounting Principles.

D  General Accounting Accountability Principles.

A  Cash paid to investors.

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

C  Costs of providing products or services to customers.

D  Sales of products or services to customers.

A  Companies that sell merchandise to customers.

B  Government-controlled companies.

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

D  Firms that have stocks listed on an exchange.

A  Statement of Cash Flows.

B  Income Statement.

C  Balance Sheet.

D  Statement of Stockholders’ Equity.

A  Assets = Liabilities + Stockholders’ Equity.

B  Liabilities – Assets = Stockholders’ Equity.

C  Assets + Stockholders’ Equity = Liabilities.

D  Assets + Liabilities = Stockholders’ Equity.