Accounting Chapter 1

14 Questions  I  By Aeriwyn
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Accounting Quizzes & Trivia
Chapter 1 Accounting Questions. Using for self-study.

  
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Questions and Answers

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  • 1. 
    Users of financial reports include all of the following except
    • A. 

      Creditors

    • B. 

      Government agencies

    • C. 

      Unions

    • D. 

      All of the above


  • 2. 
    The information provided by financial reporting pertains to
    • A. 

      Business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers.

    • B. 

      Individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers.

    • C. 

      An economy as a whole and to members of society as consumers, rather than to individual enterprises or industries.

    • D. 

      Individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers.


  • 3. 
    How does accounting help the capital allocation process attract investment capital?
    • A. 

      Both B and D

    • B. 

      Promotes productivity.

    • C. 

      Encourages innovation.

    • D. 

      Provides timely, relevant information.


  • 4. 
    Financial statements in the early 2000s provide information related to
    • A. 

      Hard assets (inventory and plant assets).

    • B. 

      Nonfinancial measurements.

    • C. 

      Forward-looking data.

    • D. 

      None of these.


  • 5. 
    What is a major objective of financial reporting?
    • A. 

      Provide information that is useful to management in making decisions.

    • B. 

      Provide information that is useful to assess the amounts, timing, and uncertainty of perspective cash receipts.

    • C. 

      Provide information that excludes claims to the resources.

    • D. 

      Provide information that clearly portray nonfinancial transactions.


  • 6. 
    Accrual accounting is used because
    • A. 

      Cash flows are considered less important.

    • B. 

      It provides a better indication of ability to generate cash flows than the cash basis.

    • C. 

      It recognizes revenues when cash is received and expenses when cash is paid.

    • D. 

      None of the above.


  • 7. 
    What is the purpose of Emerging Issues Task Force?
    • A. 

      Provide a consensus on how to account for new and unusual financial transactions.

    • B. 

      Provide timely guidance on select issues.

    • C. 

      Provide interpretation of existing standards.

    • D. 

      Provide interpretive guidance.


  • 8. 
    The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except
    • A. 

      Developing and enforcing professional ethics.

    • B. 

      Providing professional education programs.

    • C. 

      Developing auditing standards.

    • D. 

      All of the above.


  • 9. 
    Rule 203 of the Code of Professional Conduct address:
    • A. 

      Ethical requirements.

    • B. 

      Advertising to obtained clients.

    • C. 

      Auditing financial statements.

    • D. 

      Financial statements should be based on generally accepted accounting principles.


  • 10. 
    The purpose of the International Accounting Standards Board is to
    • A. 

      Promote uniform accounting standards among countries of the world.

    • B. 

      Issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.

    • C. 

      Develop a uniform currency in which the financial transactions of companies throughout the world would be measured.

    • D. 

      Arbitrate accounting disputes between auditors and international companies.


  • 11. 
    What is "expectation gap"?
    • A. 

      The difference between what the public thinks the accountant is doing and what the accountant thinks they can do.

    • B. 

      The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do.

    • C. 

      The difference between what the accountant is doing and what the Courts say the accountant should be doing.

    • D. 

      The difference between what the public thinks the accountant is doing and what Congress says the accountant is doing.


  • 12. 
    Which of the following is an ethical concern of accountants?
    • A. 

      Industry practices.

    • B. 

      Earnings manipulation.

    • C. 

      Conservative accounting.

    • D. 

      None of the above.


  • 13. 
    Authoritative standards for iGAAP include:
    • A. 

      International Financial Reporting Standards, International Accounting Standards and any GAAP standard recognized by an organized stock exchange.

    • B. 

      International Financial Reporting Standards, International Accounting Standards and U.S. GAAP only.

    • C. 

      International Financial Reporting Standards and International Accounting Standards only.

    • D. 

      International Financial Reporting Standards only.


  • 14. 
    Which of these statements regarding the iGAAP and U.S. GAAP is correct?
    • A. 

      IGAAP is considered to be "principles-based" and less detailed than U.S. GAAP

    • B. 

      U.S. GAAP is considered to be "principles-based" and more detailed than iGAAP.

    • C. 

      Both U.S. GAAP and iGAAP are considered to be "rules-based", but U.S. GAAP tends to be more complex.

    • D. 

      U.S. GAAP is considered to be "rules-based" and less detailed than iGAAP.


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