Carcello Test Bank - Asia Global Edition, 2e Jan Williams Susan Haka...

Financial Accounting, Asia Global Edition, 2e Jan Williams Susan Haka Bettner Carcello (Test Bank all Chapters, Answers at the end of each Chapter)

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Chapter 01 - Accounting: Information for Decision Making

1-1 Chapter 01

Accounting: Information for Decision Making

True / False Questions

• Managerial accounting information is designed primarily to assist investors and creditors in

deciding how to allocate scarce resources.True False

• Return on investment is the same as return of investment.

True False

• The tax return is one of the primary financial statements.

True False

• Management accounting refers to the preparation and use of accounting information

designed to meet the needs of decision makers outside the business organization.True False

• The content of management accounting reports needs to be presented in conformity with

generally accepted accounting principles.True False

• The tailoring of an accounting report to meet the needs of a specific decision maker is more

characteristic of financial accounting reports than of management accounting reports.True False

• The annual financial statements of large corporations such as Wilmar International or

Cathay Pacific need not be audited by independent certified public accountants, since these firms maintain large accounting departments as part of their organizations.True False

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Chapter 01 - Accounting: Information for Decision Making

1-2

• Generally accepted accounting principles were established by the American Accounting

Association in 1934 and are updated annually by Congress.True False

• One purpose of generally accepted accounting principles is to make accounting information

prepared by different companies more comparable.True False

• Today the most authoritative source of generally accepted accounting principles is the

American Accounting Association.True False

• The American Institute of Certified Public Accountants has the legal authority over publicly

held corporations to enforce compliance with generally accepted accounting principles.True False

• An accounting practice can become a "generally accepted accounting principle" through

widespread use, even if the practice is not mentioned in the official pronouncements of the accounting standard-setting organizations.True False

• The statement of financial position and the income statement are one and the same.

True False

• The Securities & Exchange Commission is instrumental in the development of financial

accounting standards.True False

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Chapter 01 - Accounting: Information for Decision Making

1-3

• Financial accounting standards issued by the FASB are considered generally accepted

accounting principles.True False

• External users of accounting information have a financial interest in an entity but are not

involved with the day-to-day operations of the enterprise.True False

• Investors are individuals and other enterprises that have provided equity to the reporting

enterprise.True False

• A statement of cash flows depicts the way profits have changed during a designated period.

True False

• Public accounting is the segment of the profession where professionals offer audit, tax and

consulting services to clients.True False

• The CPA examination is administered by the General Accounting Office of The U. S.

Government.True False

• Career opportunities in accounting exist in public accounting, management accounting,

governmental accounting and accounting education.True False

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