CHAPTER 1: INTRODUCTION TO ACCOUNTING AND BUSINESS

CHAPTER 1: INTRODUCTION TO ACCOUNTING AND BUSINESS

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

1.A corporation is a business that is legally separate and distinct from its owners.a.True b.False

ANSWER: True

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 -

01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms

ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

2.The role of accounting is to provide many different users with financial information to make economic decisions.a.True b.False

ANSWER: True

DIFFICULTY: Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose

ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

3.Accounting information users need reports about the economic activities and condition of businesses.a.True b.False

ANSWER: True

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose

ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

Accounting, 26e Carl Warren James Reeve Jonathan Duchac (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Chapter 1: Introduction to Accounting and Business

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4.Managerial accounting information is used by external and internal users equally.a.True b.False

ANSWER: False

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose

ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

5.Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where they work.a.True b.False

ANSWER: False

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose

ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement

BUSPROG: Ethics

6.Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.a.True b.False

ANSWER: True

DIFFICULTY: Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose

ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic 2 / 4

Chapter 1: Introduction to Accounting and Business

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

• Proper ethical conduct implies that you only consider what's in your best interest.
• True
• False

ANSWER: False

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP

ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement

BUSPROG: Ethics

• Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses

which grew out of control.

• True
• False

ANSWER: True

DIFFICULTY: Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP

ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement

BUSPROG: Ethics

• A business is an organization in which basic resources or inputs, like materials and labor, are assembled

and processed to provide outputs in the form of goods or services to customers.

• True
• False

ANSWER: True

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms

ACCT.AICPA.BB.01 - Industry ACCT.AICPA.BB.06 - Resource Management

BUSPROG: Analytic

• / 4

Chapter 1: Introduction to Accounting and Business

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

• Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.
• True
• False

ANSWER: False

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP

ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

• An example of a general-purpose financial statement would be a report about projected price increases related to

transportation costs.

• True
• False

ANSWER: False

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions

ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement

BUSPROG: Analytic

• The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure.
• True
• False

ANSWER: True

DIFFICULTY: Easy

Bloom’s: Remembering

LEARNING OBJECTIVES: ACCT.WARD.16.01-01 - 01-01

ACCREDITING STANDARDS: ACCT.ACBSP.APC.20 - Accounting for Corporations

ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement

BUSPROG: Ethics

• / 4