, OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 1: Role of Accounting in Society
Principles of Accounting, Volume 1: Financial Accounting
Chapter 1: Role of Accounting in Society
Multiple Choice
1. LO 1.1 Accounting is sometimes called the “language of _____.”
A. Wall Street
B. business
C. Main Street
D. financial statements
Solution
B
2. LO 1.2 Financial accounting information ________.
A. should be incomplete in order to confuse competitors
B. should be prepared differently by each company
C. provides investors guarantees about the future
D. summarizes what has already occurred
Solution
D
3. LO 1.2 External users of financial accounting information include all of the following except
________.
A. lenders such as bankers
B. governmental agencies such as the IRS
C. employees of a business
D. potential investors
Solution
C
4. LO 1.2 Which of the following groups would have access to managerial accounting
information?
A. bankers
B. investors
C. competitors of the business
D. managers
Solution
D
5. LO 1.2 All of the following are examples of managerial accounting activities except
________.
A. preparing external financial statements in compliance with GAAP
B. deciding whether or not to use automation
C. making equipment repair or replacement decisions
D. measuring costs of production for each product produced
Solution
A
6. LO 1.3 Which of the following is not true?
A. Organizations share a common purpose or mission.
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Chapter 1: Role of Accounting in Society
Principles of Accounting, Volume 1: Financial Accounting
Chapter 1: Role of Accounting in Society
Multiple Choice
1. LO 1.1 Accounting is sometimes called the “language of _____.”
A. Wall Street
B. business
C. Main Street
D. financial statements
Solution
B
2. LO 1.2 Financial accounting information ________.
A. should be incomplete in order to confuse competitors
B. should be prepared differently by each company
C. provides investors guarantees about the future
D. summarizes what has already occurred
Solution
D
3. LO 1.2 External users of financial accounting information include all of the following except
________.
A. lenders such as bankers
B. governmental agencies such as the IRS
C. employees of a business
D. potential investors
Solution
C
4. LO 1.2 Which of the following groups would have access to managerial accounting
information?
A. bankers
B. investors
C. competitors of the business
D. managers
Solution
D
5. LO 1.2 All of the following are examples of managerial accounting activities except
________.
A. preparing external financial statements in compliance with GAAP
B. deciding whether or not to use automation
C. making equipment repair or replacement decisions
D. measuring costs of production for each product produced
Solution
A
6. LO 1.3 Which of the following is not true?
A. Organizations share a common purpose or mission.
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