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  Income earned during the current period.

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

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

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

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

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

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

A  American Institute of Certified Public Accountants (AICPA).

B  Securities and Exchange Commission (SEC).

C  Financial Accounting Standards Board (FASB).

D  International Accounting Standards Board (IASB).

A  Internal reporting structure.

B  Language of business.

C  Tax allocation system.

D  Mathematical system of equations.

A  Conceptual framework.

B  Generally accepted rules.

C  Securities and Exchange Commission.

D  Auditor’s report.

A  Making good business decisions.

B  Marketing the company’s products to customers.

C  Paying the appropriate amount of taxes.

D  Quality of the work environment for employees.

A  Expenses.

B  Assets.

C  Liabilities.

D  Dividends.

A  Dividend.

B  Asset.

C  Expense.

D  Liability.

A  Suppliers and customers.

B    

C  Investors and creditors.

D  Government officials.

E  Tax regulators.

A    

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

C  To support government initiatives through taxation of company profits.

D  To increase the number of customers for a company.

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  Business consultants.

B  Tax preparers/planners.

C  Auditors.

D  Auditors, Business consultants and Tax preparers/planners

A  Stockholders’ equity.

B  Liabilities.

C  Assets.

D  Revenues.

A  Evaluation of internal controls.

B  Audit of financial statements.

C  Tax preparation.

D  Business consulting.

A  Balance Sheet.

B  Statement of Stockholders’ Equity.

C  Statement of Cash Flows.

D  Income Statement.

A  Statement of Cash Flows.

B  Statement of Stockholders’ Equity.

C  Balance Sheet.

D  Income Statement.

A  Consistency.

B  Faithful representation.

C  Comparability.

D  Predictive value.

A  Management.

B  Auditors.

C  Creditors.

D  Stockholders.

A  Total sales to customers.

B  Total number of employees.

C  Geographic location.

D  Net income

A  Assets.

B  Dividends.

C  Liabilities.

D  Expenses.

A  Statement of Cash Flows.

B  Balance Sheet.

C  Income Statement.

D  Statement of Stockholders’ Equity.

A  Relevance, truthfulness.

B  Truthfulness, clearness.

C  Relevance, comparability.

D  Relevance, faithful representation.

A  Balance Sheet.

B  Income Statement.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  General Accounting Accountability Principles.

B  General Accounting and Audit Principles.

C  Generally Accepted Accounting Principles.

D  Generally Accepted Auditing Principles.

A  Sales of products or services to customers.

B  Costs of providing products or services to customers.

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

D  Cash paid to investors.

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

B  Government-controlled companies.

C  Companies that sell merchandise to customers.

D  Firms that have stocks listed on an exchange.

A  Balance Sheet.

B  Statement of Cash Flows.

C  Income Statement.

D  Statement of Stockholders’ Equity.

A  Assets + Stockholders’ Equity = Liabilities.

B  Assets = Liabilities + Stockholders’ Equity.

C  Liabilities – Assets = Stockholders’ Equity.

D  Assets + Liabilities = Stockholders’ Equity.