Chapter 1 Quiz

A  Exchange of goods and services among individuals.

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  Development of more complex societies.

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

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

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

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

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

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

A  International Accounting Standards Board (IASB).

B  American Institute of Certified Public Accountants (AICPA).

C  Financial Accounting Standards Board (FASB).

D  Securities and Exchange Commission (SEC).

A  Tax allocation system.

B  Language of business.

C  Internal reporting structure.

D  Mathematical system of equations.

A  Generally accepted rules.

B  Securities and Exchange Commission.

C  Conceptual framework.

D  Auditor’s report.

A  Making good business decisions.

B  Paying the appropriate amount of taxes.

C  Marketing the company’s products to customers.

D  Quality of the work environment for employees.

A  Dividends.

B  Liabilities.

C  Assets.

D  Expenses.

A  Liability.

B  Dividend.

C  Expense.

D  Asset.

A    

B  Tax regulators.

C  Government officials.

D  Suppliers and customers.

E  Investors and creditors.

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  Mathematical procedure.

B  Information measurement/communication process.

C  Behavioral psychology.

D  Artistic presentation.

A  Auditors, Business consultants and Tax preparers/planners

B  Auditors.

C  Business consultants.

D  Tax preparers/planners.

A  Liabilities.

B  Assets.

C  Stockholders’ equity.

D  Revenues.

A  Tax preparation.

B  Business consulting.

C  Evaluation of internal controls.

D  Audit of financial statements.

A  Income Statement.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Income Statement.

B  Statement of Cash Flows.

C  Balance Sheet.

D  Statement of Stockholders’ Equity.

A  Consistency.

B  Predictive value.

C  Comparability.

D  Faithful representation.

A  Stockholders.

B  Auditors.

C  Management.

D  Creditors.

A  Geographic location.

B  Total sales to customers.

C  Net income

D  Total number of employees.

A  Dividends.

B  Expenses.

C  Liabilities.

D  Assets.

A  Statement of Stockholders’ Equity.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Income Statement.

A  Truthfulness, clearness.

B  Relevance, faithful representation.

C  Relevance, comparability.

D  Relevance, truthfulness.

A  Income Statement.

B  Balance Sheet.

C  Statement of Cash Flows.

D  Statement of Stockholders’ Equity.

A  Generally Accepted Auditing Principles.

B  Generally Accepted Accounting Principles.

C  General Accounting and Audit Principles.

D  General Accounting Accountability Principles.

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

B  Sales of products or services to customers.

C  Costs of providing products or services to customers.

D  Cash paid to investors.

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

B  Government-controlled companies.

C  Firms that have stocks listed on an exchange.

D  Companies that sell merchandise to customers.

A  Statement of Stockholders’ Equity.

B  Statement of Cash Flows.

C  Balance Sheet.

D  Income Statement.

A  Assets + Stockholders’ Equity = Liabilities.

B  Liabilities – Assets = Stockholders’ Equity.

C  Assets = Liabilities + Stockholders’ Equity.

D  Assets + Liabilities = Stockholders’ Equity.