ACCY 201 TEST 1 BURNEY TEST BANK
PRACTICE QUESTIONS SOLUTIONS
DETAILED EXPLANATIONS VERIFIED
●● External Users
Answer: Persons using accounting information who are not directly
involved in running the organization.
●● Internal Users
Answer: managers who plan, organize, and run a business
●● Bussiness Two Main Goals
Answer: Profitability- make money
Liquidity- pay your bills on time
●● Ethnics
Answer: useful info - trusted info
●● Fraud Triangle
Answer: opportunity, pressure, rationalization
●● How to prevent fraud
, Answer: internal controls that are procedures to protect assets, ensure
reliable accounting, promote efficiency, and uphold company policies
●● auditor
Answer: verify the effectiveness of internal controls
●● GAAP (Generally Accepted Accounting Principles)
Answer: The standards and rules that accountants follow while recording
and reporting financial activities.
●● FASB (Financial Accounting Standards Board)
Answer: the private board that establishes the generally accepted
accounting principles used in the practice of financial accounting
●● SEC (Securities and Exchange Commission)
Answer: U.S. government agency that oversees proper use of GAAP by
companies that sell stock and debt to the public
●● IASB (International Accounting Standards Board)
Answer: Group that identifies preferred accounting practices &
encourages global acceptance; issues IFRS
●● IFRS (International Financial Reporting Standards)
PRACTICE QUESTIONS SOLUTIONS
DETAILED EXPLANATIONS VERIFIED
●● External Users
Answer: Persons using accounting information who are not directly
involved in running the organization.
●● Internal Users
Answer: managers who plan, organize, and run a business
●● Bussiness Two Main Goals
Answer: Profitability- make money
Liquidity- pay your bills on time
●● Ethnics
Answer: useful info - trusted info
●● Fraud Triangle
Answer: opportunity, pressure, rationalization
●● How to prevent fraud
, Answer: internal controls that are procedures to protect assets, ensure
reliable accounting, promote efficiency, and uphold company policies
●● auditor
Answer: verify the effectiveness of internal controls
●● GAAP (Generally Accepted Accounting Principles)
Answer: The standards and rules that accountants follow while recording
and reporting financial activities.
●● FASB (Financial Accounting Standards Board)
Answer: the private board that establishes the generally accepted
accounting principles used in the practice of financial accounting
●● SEC (Securities and Exchange Commission)
Answer: U.S. government agency that oversees proper use of GAAP by
companies that sell stock and debt to the public
●● IASB (International Accounting Standards Board)
Answer: Group that identifies preferred accounting practices &
encourages global acceptance; issues IFRS
●● IFRS (International Financial Reporting Standards)
