TEST BANK For
College Accounting Chapters 1-30 16th Edition David Haddock, John
Price, Michael Farina
Answers are at the end of each Chapter
Chapter 1
Student name:__________
1) What is the “language of business?” List three groups who use this financial information.
Question Details
Difficulty : 1 Easy
Learning Objective : 01-01 Define accounting.
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-03 Identify the users of financial information.
Gradable : manual
Accessibility : Screen Reader Compatible
2) Cullen Company of country X and Shaw Industries of country Y have issued financial
statements in compliance with the accounting principles of their respective countries. They
would like to work together on a project and need to compare their current financial statements
prior to starting the project. However, the accounting principles of the two countries differ. What
organization might they turn to regarding this issue? (Give both the full name of the organization
and its acronym.) What is the function of this organization?
Version 1 1
,Question Details
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-05 Describe the process used to develop generally accepted accounting princip
Topic : Generally Accepted Accounting Principles
Difficulty : 2 Medium
Bloom's : Understand
AICPA : BB Global
Gradable : manual
Accessibility : Screen Reader Compatible
3) You have just entered college and decide to pursue a career as a certified bookkeeper.
What three requirements must you satisfy to receive this designation?
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Gradable : manual
Accessibility : Screen Reader Compatible
4) There are three general services public accountants offer. List and briefly describe each.
Version 1 2
,Question Details
Topic : What is Accounting?
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Difficulty : 2 Medium
Bloom's : Understand
Gradable : manual
Accessibility : Screen Reader Compatible
5) List at least five activities performed by managerial accountants.
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Gradable : manual
Accessibility : Screen Reader Compatible
6) Having enjoyed multiple accounting courses in college, you have decided to pursue a
CPA license. What requirements must you fulfill to achieve this certification?
Version 1 3
,Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Gradable : manual
Accessibility : Screen Reader Compatible
7) How do sole proprietorships, partnerships, and corporations differ?
Question Details
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-04 Compare and contrast the three types of business entities.
Topic : Types of Business Entities
AICPA : BB Legal
Difficulty : 2 Medium
Bloom's : Understand
Gradable : manual
Accessibility : Screen Reader Compatible
8) List three individuals or groups who use financial information to make decisions about a
firm. For each listed, give an example of why they would need the information.
Version 1 4
,Question Details
Topic : What is Accounting?
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-03 Identify the users of financial information.
Difficulty : 2 Medium
Bloom's : Understand
Gradable : manual
Accessibility : Screen Reader Compatible
9) List the “Big Four” public accounting firms in the United States.
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Gradable : manual
Accessibility : Screen Reader Compatible
10) Audited financial statements include an auditor’s report. What does this auditor’s report
contain?
Version 1 5
,Question Details
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-05 Describe the process used to develop generally accepted accounting princip
Topic : Generally Accepted Accounting Principles
Difficulty : 2 Medium
Bloom's : Understand
Gradable : manual
Accessibility : Screen Reader Compatible
11) List at least three of the provisions of the Sarbanes-Oxley Act.
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
AICPA : BB Legal
Learning Objective : 01-03 Identify the users of financial information.
Gradable : manual
Accessibility : Screen Reader Compatible
12) What determines the independence of Certified Public Accountants (CPAs)?
Version 1 6
,Question Details
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
AICPA : BB Legal
Learning Objective : 01-05 Describe the process used to develop generally accepted accounting princip
Topic : Generally Accepted Accounting Principles
Difficulty : 2 Medium
Bloom's : Understand
Gradable : manual
Accessibility : Screen Reader Compatible
13) Name three governmental agencies that employ a large number of accountants.
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
AICPA : BB Legal
Learning Objective : 01-02 Identify and discuss career opportunities in accounting.
Gradable : manual
Accessibility : Screen Reader Compatible
Version 1 7
,14) Accounting is often referred to as the language of __________.
14) ______
A) business
B) finance
C) money
D) data
Question Details
Difficulty : 1 Easy
Learning Objective : 01-01 Define accounting.
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Gradable : automatic
Accessibility : Screen Reader Compatible
15) The results of the accounting process are summarized in periodic reports called
__________.
15) ______
A) cash budgets
B) bank reconciliations
C) financial statements
D) worksheets
16) Which of the following is not a goal of the internal controls implemented by owners and
managers?
16) ______
A) to safeguard assets
B) to ensure reliability of accounting data
C) to promote compliance with management policies and applicable laws
D) to reduce expenses through the use of efficient processes
Question Details
Difficulty : 1 Easy
Topic : What is Accounting?
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-03 Identify the users of financial information.
Gradable : automatic
Accessibility : Screen Reader Compatible
17) The three major legal forms of business entity are the sole proprietorship, the partnership,
and the __________.
17) ______
Version 1 9
, A) merchandiser
B) corporation
C) service business
D) small business
Question Details
Difficulty : 1 Easy
Bloom's : Remember
AACSB : Analytical Thinking
AICPA : BB Industry
AICPA : FN Decision Making
Accessibility : Keyboard Navigation
Type : Static
Learning Objective : 01-04 Compare and contrast the three types of business entities.
Topic : Types of Business Entities
AICPA : BB Legal
Gradable : automatic
Accessibility : Screen Reader Compatible
18) A partnership has __________ owners.
18) ______
A) zero
B) one
C) two or more
D) either one or two
Version 1 10
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