C213 Accounting Review Questions & Answers
1. What is IASB?
a. International Accounting Standards Board (based in London).
2. What does the IASB do?
a. Create and regulate the accounting rules around the world
(except US).
3. Who creates and regulates the accounting rules for the US?
a. Fin...
a. International Accounting Standards Board (based in London).
2. What does the IASB do?
a. Create and regulate the accounting rules around the world
(except US).
3. Who creates and regulates the accounting rules for the US?
a. Financial Accounting Standards Board (FASB) *(based in NY)
4. How does management accounting differ from financial accounting?
a. Management accounting is used primarily for internal planning,
control, and evaluation.
5. What is the SEC?
a. Securities and Exchange Commission
6. What does the SEC do?
a. Ensures financial (external) statement users are provided with
reliable information
b. U.S government agency
c. Legal authority to set financial accounting rules
7. What is the AICPA?
a. American Institute of Certified Public Accountants
8. What is a CPA?
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a. Certified Public Accountant
9. What can ONLY a CPA do?
a. Sign audit report
10. What is SOX?
a. Sarbanes – Oxley Act
11. What is PCAOB?
a. Public Company Accounting Oversight Board
12. What does the PCAOB do?
a. Inspections, Investigations, Government standard for audits;
Under the SEC, it appoints members and approves actions.
13. What does management accounting provide?
a. The insight that management needs so that the business can
perform more effectively.
b. The detailed data that managers need to make decisions that will
give the business a competitive edge.
14. Which of the following is NOT one of the three primary financial
statements?
a. Statement of Retained Earnings
15. Which of the following financial statements reports a company’s
resources, obligations, and owner’s equity?
a. Balance Sheet
16. Which of the following financial statements reports the excess of
a company’s revenues over its expense?
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a. Statement of Cash Flows c. Statement of Retained
Earnings
b. Income Statement d. Balance Sheet
17. Which of the following financial statements reports the amount
of cash collected and paid out by a company?
a. Statement of Cash Flows c. Statement of Retained
Earnings
b. Income Statement d. Balance Sheet
18. What is GAAP?
a. Generally Accepted Accounting Principles
19. A corporation has total liabilities of $300 million, total owner’s
equity of $100 million, and current assets of $50 million. What is the
value of long – term assets?
a. $350 million
20. Which term is defined as the residual interest in the net assets
of a company?
a. Owner’s Equity
21. What two items of information are revealed on the balance
sheet? (Choose 2).
a. Ownership & Debt
22. Which account is seen on the balance sheet of a manufacturing
company but not on a balance sheet of a service – oriented company?
a. Inventory
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23. What is a cost that will change in the future based upon the
decision made?
a. Differential Cost
24. Which two examples are period costs?
a. Administrative Expenses
b. Selling Expenses
25. A company manufactures custom – built wooden bookshelves.
Which two costs would company classify as period costs?
a. Salary Cost of Receptionist
b. Advertising Cost
26. What role do ethical standards have in management accounting?
a. To guide the resolution to possible ethical dilemmas that the
managerial accountant may encounter.
27. Which two costs are included when calculating inventory costs?
a. Direct Labor
b. Overhead
28. The organization that develops worldwide accounting standards
is the:
a. International Accounting Standards Board (IASB).
29. Standards established by the International Accounting Standards
Board are referred to as:
a. International Financial Reporting Standards
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