Test Bank For Fundamental Accounting Principles, 25th Edition by John Wild and Ken Shaw, Kermit Larson

Test Bank For
Fundamental Accounting Principles, 25th Edition, John Wild
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Chapter 1-26 Answers at the End of Each Chapter

Chapter 01:
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Student name:__________
1) Which of the following is not accomplished by accounting?

A) Identifies business activities.
C
B) Records business activities.
C) Communicates business activities.
D) Eliminates the need for interpreting financial data.
O
E) Helps people make better decisions.
N
N
2) Which of the following is an external user of accounting information?
O
A) Purchasing manager.
B) Human resource manager.
C) Lender.
IS
D) Chief executive officer (CEO).
E) Marketing manager.
SE

3) The primary objective of financial accounting is to:

A) Serve the decision-making needs of internal users.
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B) Provide accounting information that serves external users.
C) Monitor consumer needs, tastes, and price concerns.
R
D) Provide information on both the costs and benefits of looking after products and
services.
E) 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:

A) Financial accounting.
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B) Managerial accounting.
C) External auditing.
D) SEC reporting.
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E) Bookkeeping.
C
5) Which of the following is not an external user of accounting information?
O
A) Shareholders.
B) Customers.
C) Purchasing managers.
N
D) Government regulators.
E) Creditors.
N
O
6) Which of the following is not true regarding a Certified Public Accountant?
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A) Must meet education requirements.
B) Must pass an examination.
C) Must exhibit ethical character.
D) Must meet experience requirements.
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E) Cannot hold any certificate other than a CPA.
U
7) Which of the following factors is not a component of the fraud triangle?
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, A) Opportunity
B) Pressure
C) Rationalization
D) All of the above are components of the fraud triangle.
M
ED

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

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

9) A corporation is:
N
A) A business legally separate from its owners.
B) Controlled by the FASB.
O
C) Not responsible for its own acts and own debts.
D) The same as a limited liability partnership.
E) Not subject to double taxation.
IS
SE
10) The group that sets international preferred accounting practices is called the:

A) AICPA.
B) IASB.
U
C) CAP.
D) SEC.
E) FASB.
R

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

A) APB.
B) FASB.
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C) AAA.
D) AICPA.
E) IASB.
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12) The accounting concept that requires every business to be accounted for separately from
C
other business entities, including its owner or owners is known as the:

A) Time-period assumption.
O
B) Business entity assumption.
C) Going-concern assumption.
N
D) Revenue recognition principle.
E) Measurement (Cost) principle.
N
O
13) The rule that requires financial statements to assume that the business will continue
operating instead of being closed or sold is the:
IS
A) Going-concern assumption.
B) Business entity assumption.
C) Objectivity principle.
SE
D) Measurement (Cost) principle.
E) Monetary unit assumption.
U
14) If a company is considering the purchase of a parcel of land that was originally acquired
by the seller for $100,000, is currently offered for sale at $180,000, is considered by the
R
purchaser as easily being worth $170,000, and is finally purchased for $167,000, the land should
be recorded in the purchaser’s books at: