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Principles of Financial and Managerial Accounting - D196 || A+ Verified Solutions.
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Accounting plays a vital role in the decision-making process. Which action is the first step in the decision-making process? correct answers Identify the issue. Identifying the issue is the first step in the decision-making process. The money that a company needs to buy its land, pay its employe...

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  • August 26, 2024
  • 14
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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Principles of Financial and Managerial Accounting - D196 ||
A+ Verified Solutions.
Accounting plays a vital role in the decision-making process. Which action is the first step in the
decision-making process? correct answers Identify the issue. Identifying the issue is the first step
in the decision-making process.

The money that a company needs to buy its land, pay its employees, and buy its supplies is called
capital. What are the potential sources of capital for a business? correct answers Investors,
creditors, and retained business earnings

True or False: Accountants measure and communicate the results of business activities. correct
answers True

Which primary area of accounting generates reports for internal users? correct answers
Management accounting- generates reports for internal users, such as budgets and cost analyses.

Which group uses financial information to evaluate whether a company will be able to repay a
loan? correct answers Lenders -
Lenders are interested in whether or not a company will be able to repay a loan, so they use
financial information to analyze the company's financial ability to do so.

Which of the primary financial statements reports the resources, obligations, and owner's equity
of a company? correct answers Balance sheet- Balance sheet reports the resources of a company
(the assets), the company's obligations (the liabilities), and the owners' equity, which represents
the difference between what is owned (assets) and what is owed (liabilities).
Statement of cash flows

What group of people make up the FASB? correct answers Auditors, corporate accountants,
analysts, and accounting academics. The FASB is not directly controlled by the SEC, although
SEC input is extremely important to the FASB in its deliberations.

What is the role of the GASB in setting accounting standards? correct answers a private-sector
organization that establishes accounting and financial reporting standards for U.S. state and local
governments.

What is the role of the IASB in regulating accounting standards? correct answers Establish
international accounting standards. A private organization based in London. Currently, does not
have legal authority to set accounting standards for U.S. companies,

How is it possible for an accountant to intentionally deceive financial statement users and yet
still technically be in compliance with generally accepted accounting principles (GAAP)? correct
answers There is flexibility inherent in the assumptions underlying the preparation of financial
statements. The flexibility inherent in the assumptions underlying the preparation of financial

, statements means that an accountant can intentionally deceive financial statement users and yet
still technically be in compliance with GAAP.

In what way do accountants have an economic incentive to conduct themselves ethically? correct
answers The value of the information produced by accountants is related to the confidence that
users have in the reliability of that information.Accountants are in the "trust" business. If users of
the financial information that is being prepared do not have confidence in, or do not trust, the
information that is being provided to make business decisions, then the role of the accountant
becomes far less important. If accountants and the accounting system are not reliable and
trustworthy, then the value of the information they produce is lower.

What is the role of the IRS correct answers To ensure that tax filing complies with financial
accounting standards.

What is the purpose of Financial reports? correct answers Used by individuals and organizations
that have an economic interest in the business. They provide information about the financial
performance of a company.
Bank statements

Which user of accounting information will monitor data to ensure that the company is providing
sufficient information for investors? correct answers Government agencies SEC

Which role of accounting involves obtaining and using financial information to determine the
financial health and performance of a business or product line? correct answers Evaluation

what could the American Institute of Certified Public Accountants (AICPA) do in response to the
accountants who were found guilty of unethical conduct in accounting practices? correct answers
Implement professional sanctions
They can enforce professional sanctions by taking away the CPA designation from an
accountant who has acted unethically.

What is the correct summary sequence in the accounting cycle? correct answers Analyze,
Record, Summarize, Prepare

Business documents, such as a sales invoice, a purchase order, or a check stub, are an important
part of the accounting process. From an accounting cycle standpoint, what is purpose of business
documents? correct answers To confirm that a transaction has occurred

What is the purpose of the financial accounting cycle? correct answers To turn transactions into
financial statements and provide useful financial information for decision makers

What is a transaction in accounting? correct answers An interaction in which two parties
exchange something of value

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