Exam (elaborations)
Accounting What the Numbers Mean David Marshall 12e 12.41.07 PM
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- Accounting What
Accounting What the Numbers Mean David Marshall 12e 12.41.07 PM
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,Accounting - What the Numbers Mean, 12e (Marshall)Chapter 1 Accounting—Present and Past
1) Which of the following entities would not require accounting information pertaining to their
economic activities?
A) Social clubs.
B) Not-for-profit entities.
C) State governments.
D) All of these entities require accounting information.
Answer: D
Difficulty: 1 Easy
Topic: What Is Accounting?
Learning Objective: 01-02 Identify who the users of accounting information are and explain
why they find accounting information useful.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) The authoritative financial accounting standards-setting body in the United States is presently
the:
A) Securities and Exchange Commission (SEC)
B) International Accounting Standards Board (IASB)
C) Public Company Accounting Oversights Board (PCAOB)
D) Financial Accounting Standards Board (FASB)
E) Accounting Principles Board (APB)
Answer: D
Difficulty: 1 Easy
Topic: How Has Accounting Developed?
Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
accounting standards.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,3) Which of the following statements about the Financial Accounting Standards Board is
correct?
A) The FASB is an agency of the Federal government.
B) The FASB has the authority to fine a noncompliant firm.
C) The FASB follows a due process procedure that permits input from interested parties before
an Accounting Standards Update (ASU) is issued.
D) The FASB is controlled by the American Institute of CPAs.
Answer: C
Difficulty: 2 Medium
Topic: How Has Accounting Developed?
Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
accounting standards.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Major classifications of accounting activity would not include:
A) financial accounting, internal auditing, public accounting.
B) internal auditing, governmental accounting, managerial accounting.
C) financial accounting, national accounting, cost accounting.
D) auditing, income tax accounting, governmental accounting.
Answer: C
Difficulty: 1 Easy
Topic: What Is Accounting?
Learning Objective: 01-03 Identify the variety of professional services that accountants provide.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) Which of the following is not an example of a decision or informed judgment that a potential
investor would make from accounting information?
A) Future profitability based on past profitability.
B) Probability of success of a new product development.
C) A forecast of dividends.
D) Assessment of risk that a company may have more debt than it can repay if the economy
enters a recession.
Answer: B
Difficulty: 2 Medium
Topic: What Is Accounting?
Learning Objective: 01-02 Identify who the users of accounting information are and explain
why they find accounting information useful.
Bloom's: Understand
AACSB: Reflective Thinking
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, Accessibility: Keyboard Navigation
6) Which of the following is not an example of a decision or informed judgment that a potential
employee could make from accounting information?
A) Personnel turnover statistics (i.e., hiring and terminations).
B) Probability of the company's ability to make profit sharing plan contributions in the future.
C) Assessment of the risk that the company may become bankrupt in the near future.
D) The extent of the company's commitment to a research program.
Answer: A
Difficulty: 2 Medium
Topic: What Is Accounting?
Learning Objective: 01-02 Identify who the users of accounting information are and explain
why they find accounting information useful.
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Which of the following are qualified to express an auditor's opinion about an entity's financial
statements?
A) A Comptroller.
B) A Certified Management Accountant.
C) A Certified Internal Auditor.
D) A Certified Public Accountant.
Answer: D
Difficulty: 2 Medium
Topic: What Is Accounting?
Learning Objective: 01-03 Identify the variety of professional services that accountants provide.
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
8) Which classification of accounting is most concerned with the use of economic and financial
information to plan and control many of the activities of the entity?
A) Financial accounting.
B) Auditing / Public accounting.
C) Managerial accounting.
D) Income tax accounting.
Answer: C
Difficulty: 1 Easy
Topic: What Is Accounting?
Learning Objective: 01-03 Identify the variety of professional services that accountants provide.
Bloom's: Remember
AACSB: Analytical Thinking
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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