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Multiple Choice Quiz
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1
The process of providing financial information to external decision makers is referred to as
A)Public Accounting
B)Government Accounting
C)Financial Accounting
D)Managerial Accounting
2
Professional Judgement is
A)Not required in accounting because of GAAP
B)Not required because there are tax laws
C)Is required because accountants always have choices in methods
D)Is required because accountants are professionals and do not need to follow GAAP
3
The primary objective of financial reporting is to provide information:
A)About a firm's financing and investing activities
B)About a firm's economic resources and obligations
C)About a firm's products and services
D)About the economic well being of a company as a whole
4
GAAP include which of the following pronouncements:
A)Recommendations in the CICA
B)Emerging Issues Committee Abstracts
C)Acceptable historical practices and current pronouncements
D)Accounting Guidelines
5
Under differential reporting recommendations, a reporting enterprise can choose not to apply certain specified recommendations in the CICA Handbook if:
A)The company has no shares or other securities that are publicly traded, and all the shareholders agree
B)The Company is not otherwise publicly accountable, such as a rate regulated enterprise or financial institution
C)All of its shareholders agree unanimously with the use of the alternative accounting approach
D)The company shares are not traded on the local stock exchange.
6
Stewardship Reporting focuses on:
A)Showing investors what sales revenues were
B)Showing the financial statement reader just how the resources entrusted to the management's care were managed
C)Showing employees how high their raises will be
D)Showing the financial statement reader how many shop stewards are employed
7
Minimum compliance:
A)Refers to the motivation of managers to reveal the least amount of information that is possible within the recommendations of the CICA Handbook and still comply with GAAP
B)Refers to the motivation of managers to realize a minimum amount of profit
C)Refers to the motivation of managers to reveal as little debt as possible in the balance sheet
D)Refers to the motivation of managers to report the minimum amount of expenses to reduce taxes payable
8
The function of measuring and reporting information to absentee investors is called the:
A)accounting function
B)stewardship function.
C)auditing function
D)management function
9
Which of the following types of organizations have a GAAP constraint?
A)Public corporations.
B)Private corporations.
C)Not-for-profit organizations.
D)Partnerships.
10
A company might wish to report the least possible accounting income because
A)It wants to pay the least amount of taxes.
B)It wants to discourage competition from entering its market
C)It wants to disclose it affairs with minimum compliance
D)It wants to be conservative by maximizing expenses and not reporting revenues





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