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

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

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

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

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  Internal reporting structure.

B  Mathematical system of equations.

C  Tax allocation system.

D  Language of business.

A  Generally accepted rules.

B  Conceptual framework.

C  Auditor’s report.

D  Securities and Exchange Commission.

A  Quality of the work environment for employees.

B  Paying the appropriate amount of taxes.

C  Marketing the company’s products to customers.

D  Making good business decisions.

A  Dividends.

B  Liabilities.

C  Expenses.

D  Assets.

A  Expense.

B  Asset.

C  Liability.

D  Dividend.

A  Investors and creditors.

B  Government officials.

C    

D  Tax regulators.

E  Suppliers and customers.

A  To support government initiatives through taxation of company profits.

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

C  To increase the number of customers for a company.

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

E    

A  Behavioral psychology.

B  Mathematical procedure.

C  Information measurement/communication process.

D  Artistic presentation.

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  Audit of financial statements.

B  Evaluation of internal controls.

C  Tax preparation.

D  Business consulting.

A  Income Statement.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Income Statement.

B  Statement of Stockholders’ Equity.

C  Balance Sheet.

D  Statement of Cash Flows.

A  Predictive value.

B  Faithful representation.

C  Consistency.

D  Comparability.

A  Stockholders.

B  Creditors.

C  Management.

D  Auditors.

A  Net income

B  Total number of employees.

C  Geographic location.

D  Total sales to customers.

A  Liabilities.

B  Assets.

C  Dividends.

D  Expenses.

A  Statement of Stockholders’ Equity.

B  Statement of Cash Flows.

C  Balance Sheet.

D  Income Statement.

A  Relevance, truthfulness.

B  Relevance, faithful representation.

C  Truthfulness, clearness.

D  Relevance, comparability.

A  Balance Sheet.

B  Income Statement.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Generally Accepted Accounting Principles.

B  General Accounting Accountability Principles.

C  Generally Accepted Auditing Principles.

D  General Accounting and Audit Principles.

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

B  Costs of providing products or services to customers.

C  Cash paid to investors.

D  Sales of products or services to customers.

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

B  Firms that have stocks listed on an exchange.

C  Companies that sell merchandise to customers.

D  Government-controlled companies.

A  Statement of Cash Flows.

B  Income Statement.

C  Statement of Stockholders’ Equity.

D  Balance Sheet.

A  Assets = Liabilities + Stockholders’ Equity.

B  Assets + Liabilities = Stockholders’ Equity.

C  Assets + Stockholders’ Equity = Liabilities.

D  Liabilities – Assets = Stockholders’ Equity.