BUS 120 TEST 1 CH 1-3 QUESTIONS AND ANSWERS
Explain accounting: - Answers - an information system that identifies, records, and
communicates the economic events of an organization to interested users.
Bookkeeping? - Answers - only the recording of economic events
What are accountings three activities? - Answers - 1. Identification
2. Recording
3. Communication
Example of economic events? - Answers - telephone service by AT&T
Identify the users and uses of accounting. - Answers - Internal users (users within the
organization) & External users (users outside the organization)
What are some questions a internal user would ask? - Answers - Finance: Is there
enough cash to pay dividents to Microsoft stockholders?
HR: Can we give employees pay raises this year?
Managament aspect: What product do we make the most off of and should we get rid of
any product?
What are questions external users ask? - Answers - By investors:Is general electric
earning good income?
Creditors: Will United airlines be able to pay their debts?
Managerial accounting? - Answers - a field of accounting that provides internal reports
to help users make decisions about their companies
Two most common types of external users? - Answers - 1. Investors 2. Creditors
Financial accounting? - Answers - field of accounting that provides economic and
financial information for investors, creditors, and other external users.
What does the Sarbanes-Oxley act require? - Answers - - Top management to certify
accuracy of financial information
- Severe penalties for fraudulent financial activity
- Increased independence of auditors
- Increased responsibility for board of directors
Explain accounting: - Answers - an information system that identifies, records, and
communicates the economic events of an organization to interested users.
Bookkeeping? - Answers - only the recording of economic events
What are accountings three activities? - Answers - 1. Identification
2. Recording
3. Communication
Example of economic events? - Answers - telephone service by AT&T
Identify the users and uses of accounting. - Answers - Internal users (users within the
organization) & External users (users outside the organization)
What are some questions a internal user would ask? - Answers - Finance: Is there
enough cash to pay dividents to Microsoft stockholders?
HR: Can we give employees pay raises this year?
Managament aspect: What product do we make the most off of and should we get rid of
any product?
What are questions external users ask? - Answers - By investors:Is general electric
earning good income?
Creditors: Will United airlines be able to pay their debts?
Managerial accounting? - Answers - a field of accounting that provides internal reports
to help users make decisions about their companies
Two most common types of external users? - Answers - 1. Investors 2. Creditors
Financial accounting? - Answers - field of accounting that provides economic and
financial information for investors, creditors, and other external users.
What does the Sarbanes-Oxley act require? - Answers - - Top management to certify
accuracy of financial information
- Severe penalties for fraudulent financial activity
- Increased independence of auditors
- Increased responsibility for board of directors
