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Chapter Quiz
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1
The purpose of accounting is to provide financial information about a business to individuals and organizations,
A)True
B)False
2
Individuals, agencies, and organizations who have the need and the right to be informed about accounting are called users.
A)True
B)False
3
Since financial information is communicated in accounting terms, accounting is said to be the "language of business"
A)True
B)False
4
The Financial Accounting Standards Board developed generally accepted accounting principles (GAAP) to provide procedures and guidelines to be followed in the accounting process.
A)True
B)False
5
A partnership is owned by stockholders or shareholders.
A)True
B)False
6
Stockholders have very little influence on business decisions.
A)True
B)False
7
A business that makes a product to sell is called a manufacturing business.
A)True
B)False
8
A CMA is a Certified Marketing Auditor
A)True
B)False
9
GAAP are rules created by companies to make sure accountants are educated
A)True
B)False
10
A business entity is an individual, association or organization with control over economic resources and which engages in economic activities.
A)True
B)False
11
A sole proprietor has ultimate control over his business.
A)True
B)False
12
Ethics are not crucial to accounting.
A)True
B)False
13
FASB is a private entity that sets financial accounting principles.
A)True
B)False
14
Opportunities in accounting include financial, managerial, and tax accounting.
A)True
B)False
15
Corporate shareholders are legally liable for the debts of the corporation.
A)True
B)False
16
User groups of accounting information may include
A)owners and managers of the business
B)creditors and suppliers
C)government agencies and labor unions
D)stock exchanges and financial analysis
E)all of the above
17
Information needed by users of accounting data include
A)the firm's current profitability
B)financial conditions of the business
C)whether the firm can pay bills on time
D)information in order to determine taxes
E)all of the above
18
Accountants can achieve professional recognition in accounting by receiving any of the following EXCEPT
A)CPA
B)CLU
C)CMA
D)CIA
E)all of the above
19
Bringing together various items of information to determine or explain a result is
A)interpreting
B)summarizing
C)classifying
D)recording
E)none of the above
20
A proprietor manages
A)a single-owner business
B)a partnership
C)a corporation
D)a nonprofit agency
E)any of the above
21
A business that purchases a product from another business to sell to customers is called a
A)service business
B)merchandising business
C)manufacturing business
D)nonprofit business
E)none of the above
22
The person who records or enters information in account records may be referred to as a(n)
A)investigator
B)journalist
C)accounting clerk
D)scribe
E)all of the above
23
Public accountants offer which of the following services
A)auditing
B)tax planning
C)tax preparation
D)management consulting
E)all of the above
24
A person owning the sole interest in a business may be called the
A)creditor
B)proprietor
C)executor
D)originator
E)obligor
25
The majority of accounting opportunities are in which field?
A)cost management accounting
B)public accounting
C)governmental accounting
D)private accounting
E)none of the above
26
Ethics are:
A)information
B)a legal concept
C)a belief that establishes right from wrong
D)not useful in accounting
E)none of the above
27
CPA stands for:
A)Certified Public Assistant
B)Certified Public Accountant
C)Certified Public Auditor
D)Certified Private Accountant
E)none of the above
28
GAAP stands for:
A)Generally Authorized Accounting Practices
B)Generally Accepted Auditing Practices
C)Generally Accepted Accounting Principles
D)Generally Authorized Accepted Principles
E)none of the above
29
Owners of a corporation are called:
A)shareholders
B)sole proprietors
C)partners
D)all of the above
E)none of the above
30
Which of the following organizations are a separate legal entity apart from its owners:
A)partnership
B)sole proprietorship
C)corporation
D)all of the above
E)none of the above





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