Accounting Chapter 1 Questions With Accurate
Solutions
Accounting is the information system that measures business activities, processes the
information into reports, and communicates the results to decision makers. TRUE/FALSE -
CORRECT ANSWERTRUE
Accounting Chapter 1 Questions With Accurate
Solutions
Accounting is the information system that measures business activities, processes the
information into reports, and communicates the results to decision makers. TRUE/FALSE -
CORRECT ANSWER✅✅✅TRUE
Accounting is referred to as the language of business because it is the method of communicating
business information to stakeholders. TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Managerial accounting focuses on information for external decision makers. TRUE/FALSE -
CORRECT ANSWER✅✅✅FALSE
Stockholders primarily use managerial accounting information for decision-making purposes.
TRUE/FALSE - CORRECT ANSWER✅✅✅FALSE
A creditor is a person who owes money to the business. TRUE/FALSE - CORRECT
ANSWER✅✅✅FALSE
Local, state, and federal governments use accounting information to calculate income tax.
TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Financial accounting focuses on information for decision makers outside of the business, such as
creditors and taxing authorities. TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Business owners use accounting information to set goals, evaluate progress toward those goals,
and make adjustments when needed. TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Outside investors would ordinarily use managerial accounting information to decide whether or
not to invest in a business. TRUE/FALSE - CORRECT ANSWER✅✅✅FALSE
,A creditor is any person who has an ownership interest in a business. TRUE/FALSE -
CORRECT ANSWER✅✅✅FALSE
Different users of financial statements focus on the different parts of the financial statements for
the information they need. TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Any person or business to whom a business owes money is called the business's creditor.
TRUE/FALSE - CORRECT ANSWER✅✅✅TRUE
Managerial accounting provides information to ________.
A) internal decision makers
B) outside investors and lenders
C) auditors
Which of the following statements best defines financial statements?
A) Financial statements are the information systems that record monetary and nonmonetary
business transactions.
B) Financial statements are the verbal statements made to business news organizations by chief
financial officers.
C) Financial statements are documents that report on a business in monetary terms, providing
information to help people make informed business decisions.
D) Financial statements are plans and forecasts for future time periods based on information
from past financial periods. - CORRECT ANSWER✅✅✅C) Financial statements are
documents that report on a business in monetary terms, providing information to help people
make informed business decisions.
The field of accounting that focuses on providing information for external decision makers is
________.
A) managerial accounting
B) financial accounting
The field of accounting that focuses on providing information for internal decision makers is
________.
A) managerial accounting
B) financial accounting
C) nonmonetary accounting
Which of the following users would rely on management accounting information for decision-
making purposes?
A) potential investors
B) creditors
C) customers
D) company managers - CORRECT ANSWER✅✅✅D) company managers
18) Which of the following is an external user of a business's financial information?
A) customers
B) cost accountant
C) company manager
D) the board of directors - CORRECT ANSWER✅✅✅A) customers
_______ are professional accountants who serve the general public, not one particular company.
A) Certified public accountants
B) Certified financial accountants
C) Audit accountants
D) Controllers - CORRECT ANSWER✅✅✅A) Certified public accountants
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