John Wild Test - A) Identifies business activities. B) Records b...

Financial Accounting Fundamentals, 8e John Wild (Test Bank All Chapters, Answers at the end of each Chapter)

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Version 1 1 Chapter 1 (1) 1) Which of the following is not accomplished by accounting?

• Identifies business activities.
• Records business activities.
• Communicates business activities.
• Eliminates the need for interpreting financial data.
• Helps people make better decisions.

2) Which of the following is an external user of accounting information?

• Purchasing manager.
• Human resource manager.
• Lender.
• Chief executive officer (CEO).
• Marketing manager.

3) The primary objective of financial accounting is to:

• Serve the decision-making needs of internal users.
• Provide accounting information that serves external users.
• Monitor consumer needs, tastes, and price concerns.
• Provide information on both costs and benefits of looking after products and services.
• Know what, when, and how much product to produce.

4) The area of accounting aimed at serving the decision-making needs of internal users is: 2 / 4

Version 1 2

• Financial accounting.
• Managerial accounting.
• External auditing.
• SEC reporting.
• Bookkeeping.

5) Which of the following isnot an external user of accounting information?

• Shareholders.
• Customers.
• Purchasing managers.
• Government regulators.
• Creditors.

6) Which of the following is not true regarding a Certified Public Accountant?

• Must meet education requirements.
• Must pass an examination.
• Must exhibit ethical character.
• Must meet experience requirements.
• Cannot hold any certificate other than a CPA.

7) Which of the following factors is not a component of the fraud triangle?

• Opportunity
• Pressure
• Rationalization
• All of the above are components of the fraud triangle.
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Version 1 3

8) Which of the following is not true regarding ethics:

• Ethics are beliefs that separate right from wrong.
• Good ethics are good business.
• Ethics do not affect the operations or outcome of a company.
• Accountants face ethical choices as they prepare financial reports.
• Ethics are accepted standards of good and bad behavior.

9) A corporation is:

• A business legally separate from its owners.
• Controlled by the FASB.
• Not responsible for its own acts and own debts.
• The same as a limited liability partnership.
• Not subject to double taxation.

10) The group that sets international preferred accounting practices is called the:

A) AICPA.

B) IASB.

C) CAP.

D) SEC.

E) FASB.

11) The Securities and Exchange Commission (SEC) has given the task of setting GAAP to

the:

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